Preamble

The House—after the Adjournment on 13th, April for the Easter Recess—met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into which are applicable thereto, have been complied with, namely:

London Overground Wires, Etc., Bill [Lords].

Oxford Corporation Bill [Lords].

South Suburban Gas Bill [Lords].

Bills to be read a Second time.

Private Bill Petitions [Lords] (Standing Orders not complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the Petition for the following Bill, originating in the Lords, the Standing Orders have not been complied with, namely:

Knutsford Urban District Council [Lords].

Report referred to the Select Committee on Standing Orders.

Dewsbury and Ossett Passenger Transport Bill,

Southern Railway Bill,

Read the Third time, and passed.

Bridlington Corporation Bill,

As amended, considered; to be read the Third time.

Lyme Regis District Water Bill [Lords],

Read a Second time, and committed.

Ministry of Health Provisional Order (Sheffield) Bill,

Read the Third time, and passed.

Oral Answers to Questions — TRADE AND COMMERCE.

GLAZED AND UNGLAZED PAPER (CANADA).

Mr. T. WILLIAMS: 1.
asked the President of the Board of Trade if he has now completed inquiries into the private agreement between Canadian and British producers of glazed and unglazed paper; and, if so, will he state the results?

The PRESIDENT of the BOARD of TRADE (Mr. Runciman): I am informed that an understanding has been reached
between the British and Canadian manufacturers of unglazed and machine glazed kraft paper regarding the limitation of competition in their respective home markets and that this understanding is entirely satisfactory to the British industry.

Mr. WILLIAMS: If monopolies in this country and any of the Dominions enter into arrangements to restrain trade and to exploit consumers in each country, have we any power to deal with them?

Mr. RUNCIMAN: No, Sir. I am afraid we have not.

Mr. WILLIAMS: Do I understand from the right hon. Gentleman that in any such case he has no power to interfere to prevent undue exploitation of the general public by these monopolies?

Mr. RUNCIMAN: I cannot give a general answer to a general question of that kind. With reference to the question on the Paper, I have no power to intervene.

NEW INDUSTRIES (DISTRESSED AREAS).

Mr. PRICE: 2.
asked the President of the Board of Trade whether he is now in a position to make a statement with reference to the establishment of new industries in the distressed areas for the purpose of mitigating unemployment?

Mr. RUNCIMAN: I would refer the hon. Member to the reply which I gave to him on 28th March. Collection of information is proceeding but I am unable at the present time to say when it will be possible to make a further statement to the House.

Sir JOSEPH NALL: Is the right hon. Gentleman aware that one of the chief reasons for the delay in this respect is the uncertainty relating to the Ray-Committee's Report and recommendations?

Mr. RUNCIMAN: We are trying to reduce those uncertainties to a minimum.

ARGENTINA.

Mr. GRAHAM WHITE: 3.
asked the President of the Board of Trade if he is now in a position to make a statement on the negotiations for a trade agreement with Argentina?

Mr. RUNCIMAN: Would my hon. Friend be so good as to defer his question
until Thursday, when I hope to be in a position to give him an answer?

TELEPHONE APPARATUS (CANADIAN DUTY).

Mr. WHITE: 4.
asked the President of the Board of Trade if he is now in a position to state the circumstances in which a duty of 10 per cent. has been placed on telephone apparatus exported from the United Kingdom to Canada?

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I have been asked to reply. At the instance of His Majesty's Government in Canada consultations have taken place between them and His Majesty's Government in the United Kingdom, in accordance with the provisions of Article 23 of the United Kingdom-Canada Trade Agreement, as the result of which the duties on certain classes of United Kingdom goods entering Canada have been recently readjusted. As a set-off against the imposition of a duty on United Kingdom telephone apparatus and the withdrawal of preference in the case of a few United Kingdom goods, increased preferences, coupled in most cases with free entry, have been accorded to a number of other classes of United Kingdom goods. The details of the tariff changes referred to above are set out in the reply given by me to a question addressed to me by the right hon. Gentleman the Leader of the Opposition on the 12th instant. His Majesty's Government in Canada, having regard to Article 17 of the Trade Agreement, have also agreed to fix the value of the pound sterling for exchange dumping duty purposes at 4.25 dollars instead of 4.40 dollars.

PALESTINE (BRITISH IMPORTS).

Sir NICHOLAS GRATTAN-DOYLE: 5.
asked the President of the Board of Trade what have been the imports during the past five years into Palestine of boots, shoes and wearing apparel of British manufacture?

Mr. RUNCIMAN: Particulars of the imports into Palestine of wearing apparel manufactured in the United Kingdom are not yet available for 1932, but during the five years 1928 to 1932 the aggregate declared value of the domestic exports of apparel (including boots and shoes) consigned from the United Kingdom to Palestine (including Trans-Jordan) was £201,387.

EXPORTS (IRISH FREE STATE).

Mr. LUNN: 6.
asked the President of the Board of Trade whether he can give figures showing the fall in general exports to the Irish Free State since the imposition of duties on imports from that country?

Mr. RUNCIMAN: As the answer involves a number of figures I will circulate it in the OFFICIAL REPORT.

Following is the answer:

The following table shows the total declared value of merchandise exported from the United Kingdom and registered during the undermentioned periods as consigned to the Irish Free State:


Period.
Exports from the United Kingdom consigned to the Irish Free State.


Produce and manufactures of the United Kingdom.
Imported Merchandise.


1932.
£'000.
£'000.


Jan. to March
7,048
1,807


April to June
8,421
1,696


July to Sept
5,425
1,395


Oct. to Dec.
4,880
1,183


1933.




Jan. to March
4,063 (a)
988(a)


(a) Provisional figures.

Note.—The duties imposed by the Irish Free State (Special Duties) Order, 1932, on goods imported into the United Kingdom from the Irish Free State, took effect as from the 15th July, 1932.

ANGLO-DANISH AGREEMENT.

Mr. SPENCER: 8.
asked the Secretary for Mines whether any arrangement has been made with Denmark for an increased sale of British coal and coke in the Danish market?

Mr. MILNE: 9.
asked the Secretary for Mines the estimated tonnage by which the total export of coal from Great Britain will be increased as a result of the recent trade negotiations with certain foreign countries?

Miss WARD: 10.
asked the Secretary for Mines if, under the proposed agreements, he can give any estimate in metric tons of the increased export of British coal to the Scandinavian countries and to Germany?

Mrs. SHAW: 11.
asked the secretary for Mines the nature of the agreement suggested between this country and Sweden as to coal and coke exports from Great Britain?

Mr. SOPER: 12.
asked the Secretary for Mines whether the agreement for the additional export of British coal and coke to the Scandinavian countries will be arrived at on a minimum or maximum basis?

Mr. MARTIN: 13.
asked the Secretary for Mines what additional tonnage of British coal and coke will be exported to Norway, Sweden, Denmark and Iceland, respectively, as a result of the new trade agreements with those countries?

Mr. HENDERSON STEWART: 14.
asked the Secretary for Mines if any arrangements have been made in connection with the projected trade agreements for the increase of the export of British coal and coke; and, if so, with what countries?

Mr. DICKIE: 16.
asked the Secretary for Mines if he is now in a position to state what arrangements, if any, have been arrived at with Germany on the coal licensing system?

The SECRETARY far MINES (Mr. Ernest Brown): A trade agreement with Denmark was signed yesterday. The agreement will be published in full in a White Paper which will be issued tomorrow. Full details of other agreements as soon as they are concluded will appear in White Papers which my right hon. Friend, the President of the Board of Trade, hopes it will be possible to present to the House in the very near future, but I regret I am not, in the meantime, in a position to add anything to the statement which he made in debate on 12th April.

CANADA AND UNITED STATES.

Mr. MORGAN JONES: 17.
asked the Secretary of State for Dominion Affairs whether he has any information relating to the recent negotiations for a tariff agreement between Canada and the United States of America and, if so, can he state the form of any agreement made; and, in view of the Ottawa Agreements, what action, if any, the Government propose to take?

Mr. J. H. THOMAS: I have nothing to add to the reply which I gave to the hon. Member for Wolverhampton, East (Mr. Mander) on 7th March.

Mr. JONES: Is the Canadian Government keeping in touch with the British Government and informing them of any further negotiations that are taking place?

Mr. THOMAS: I do not know that any negotiations are taking place.

SUEZ CANAL, (CHARGES).

Captain PETER MACDONALD: 49.
asked the Chancellor of the Exchequer whether he will consider initiating an arrangement to refund to British shipping companies out of the revenue from Suez Canal shares an annual increasing proportion of the Suez Canal tolls paid by them with a view to relieving this burden from British shipping, and indicating the desire of the Government to abolish all tolls on land and sea other than those that may be necessary for purely maintenance purposes?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I have carefully considered my hon. and gallant Friend's suggestion, but I fear that I am not able to adopt it.

IMPORT DUTIES (LACE).

Mr. CAPORN: 50.
asked the Chancellor of the Exchequer whether he is aware that applications for revision of the import duties on lace were made to the Import Duties Advisory Committee over 12 months ago; and whether he has received any advice from the committee with reference to such applications?

Mr. HORE-BELISHA: I am aware that the committee have given notice that an application on this subject was under consideration by them. Up to the present no recommendation for the modification of the existing duty has been received.

WHOLESALE PRICES.

Mr. MABANE: 51.
asked the Chancellor of the Exchequer whether he can state the result of the efforts of the Government to raise the level of wholesale prices; and whether he can give the index figure for wholesale prices in this country in August, 1932, and at the most recent available date?

Mr. HORE-BELISHA: The index figure for wholesale prices was 97.7 in July, 1932, 99.6 in August, 1932, and 97.6 in March, 1933. The level of wholesale prices in this country has remained steady notwithstanding a fall of about 5 per cent. in world prices during the period.

Oral Answers to Questions — COAL INDUSTRY.

OIL ENTRACUON.

Mr. RICHARD EVANS: 7.
asked the Secretary for Mines whether he will make a statement to the House on the present position regarding the extraction of fuel oils from coal and the Government's attitude thereto?

Mr. E. BROWN: No, Sir. I have no statement to make.

EXPORTS (GERMANY).

Mrs. WARD: 15.
asked the Secretary for Mines if he will state the terms of the settlement with Germany as to increased exports of coal from this country; if the agreement makes any reference to bunkers; and if, in the event of any expansion of the world coal production, the arrangement provides for any additional increase?

Mr. E. BROWN: For the reasons given in my reply to the question by my hon. Friend the Member for St. Helens (Mr. Spencer), I am unable to answer the first and third parts of the question. In reply to the second part, there are now no restrictions on bunker coal, and such coal is, therefore, not dealt with in the agreement.

Oral Answers to Questions — AGRICULTURE.

SMALLHOLDINGS.

Sir SAMUEL ROSBOTHAM: 18.
asked the Minister of Agriculture if he will state the six county councils that have established the largest numbers of smallholdings and the respective figures; the names of those county councils which have set up less than 12 holdings and the respective numbers; and what action the Ministry propose to facilitate the policy of land settlement?

The MINISTER of AGRICULTURE (Major Elliot): As the answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

The six county councils that have established the largest number of holdings since the passing of the Small Holdings and Allotments Act, 1908, up to the 31st December, 1932—the date of the latest returns—are:



Holdings.


The Isle of Ely
2,501


Norfolk
2,067


Cambridge
1,945


Bedford
1,825


Worcester
1,408


Somerset
1,406

These figures include holdings sold to smallholders by the respective councils as well as those still retained and let, but do not include holdings which councils have given up. No county councils have provided less than 12 holdings during the period mentioned.

Under the Small Holdings and Allotments Act, 1926, the six county councils in England and Wales which have established the largest number of holdings up to the 31st December, 1932, are:



Holdings.


Worcester
155


Lancashire
90


Salop
86


Cheshire
84


West Suffolk
75


Norfolk
66

The county councils which under the 1926 Act have established less than 12 holdings are:—



Holdings.


Beds.
1


Berks.
8


Cornwall
10


Cumberland
—


Derby
3


Hants.
—


Hertford
1


Hunts.
8


Lines. (Holland)
1


Lines. (Lindsey)
—


Northants.
2


Northumberland
7


Notts.
8


Oxford
—


Rutland
—


Soke of Peterborough
—


Suffolk, East
6


Sussex, East
2

Holdings.


Sussex, West
—


Westmorland
—


Yorks. N. Riding
8


Wales.



Brecon
1


Caernarvon
—


Cardigan
—


Carmarthen
7


Denbigh
5


Merioneth
5


Radnor
5

In reply to the last part of the question, facilities already exist for the provision of further holdings under the Small Holdings and Allotments Act, 1926, and I am prepared to consider any schemes put forward by county councils for approval under Section 2 of that Act, provided such schemes are framed with due regard to the particular necessity for economy in public expenditure at the present time.

NEW POTATOES (DUTY).

Mr. LIDDALL: 19.
asked the Minister of Agriculture if he is now in a position to state whether the duty on new potatoes will be extended to include the months of July and August?

Major ELLIOT: I am not at present in a position to add anything to the reply which I gave on 2nd March to a question put by my hon. and. gallant Friend the Member for Ayr Burghs (Lieut.-Colonel Moore).

LAND DRAINAGE.

Mr. T. WILLIAMS: 20.
asked the Minister of Agriculture if the Government propose to bring forward any scheme to deal with land drainage this Session?

Major ELLIOT: No Sir.

Mr. WILLIAMS: Is it the Government s intention to do anything to assist catchment area boards who are prepared to undertake schemes?

Major ELLIOT: That is not the question on the Paper. The question on the Paper was whether the Government were bringing forward any scheme to deal with land drainage this Session and the answer, as I say, is "No."

Mr. WILLIAMS: But if big schemes are brought forward, are the Government going to assist them or not?

Major ELLIOT: It is simply a matter of the resources at my disposal. I will assist them fully within the limits of those resources.

MEAT PRICES.

Mr. T. WILLIAMS: 21.
asked the Minister of Agriculture the average wholesale

Average Monthly Prices (per lb.) of Home Produced and Imported Meat at Wholesale Markets from October. 1932, to March, 1933.


Description.
October.
November.
December
January.
February.
March.


Beef:
d.
d.
d.
d.
d.
d.


English, fresh:








Steer and Heifer
6⅜
6¼
6¾
7¼
7⅛
7


Cow and Bull
4½
4½
4⅝
5⅛
5⅛
5⅛


Argentine, chilled:









5¾
5⅟
5¾
5⅟
5¾
5⅜


Fores
2¾
3⅝
3½
4⅛
3⅟
3⅟


Australian, frozen:








Hinds
3¼
3⅝
3¾
3¾
3¾
3½


Crops
2⅜
2⅟
3¼
3⅜
3⅜
3¼


Mutton:








English, Teg and Wether
5⅟
6⅛
7
8
8¼
9


Argentine
3⅛
3½
4
4⅛
4⅛
3¾


New Zealand
3½
4⅛
4½
4⅝
4⅝
4½


Lamb:








British
6¼
6¾
7¾
8¾
9¾
*12½


New Zealand
5⅛
5⅟
6½
6⅝
6⅜
5¾


Pork:








British
6⅝
6⅟
7⅟
8
7⅟
8¼


* Including also new season's lamb.


NOTE.—The prices are the averages of 1st and 2nd quality.

Average Prices (per lb.) of Meat at retail shops in Great Britain and Ireland, as ascertained by the Ministry of Labour, at the dates indicated.


Description.
1st November, 1932.
1st December, 1932.
31st December, 1932.
1st February, 1933.
1st March, 1933.
1st April, 1933.


Beef, British:
d.
d.
d.
d.
d.
d.


Ribs
14¼
14¼
14¼
14¼
14
14


Thin Flank
7½
7½
7½
7½
7½
7½


Beef, Chilled or Frozen:








Ribs
8¾
9
9
9
9
9


Thin Flank
4½
4¾
4¾
4¾
4¾
4¾


Mutton, British:








Legs
14
14
14¼
14½
14½
14¾


Breast
7
7
7¼
7½
7½
7½


Mutton, Frozen:








Legs
9
9
9
9¼
9¼
9¼


Breast
3½
8¾
3¾
3¾
3¾
3¾


NOTE-Official statistics as to the prices of lamb and pork are not collected.

MEAT AND DAIRY PRODUCTS (IMPORTS).

Mr. LAMBERT: 22.
asked the Minister of Agriculture what countries and Dominions have agreed to limit imports

and retail price of home and foreign produced meat per pound during the past six months?

Major ELLIOT: As the answer involves a large number of figures I will circulate it in the OFFICIAL REPORT.

Following is the answer:

of meat and dairy products to the 22nd June next; the extent of the limitation; and the percentage to 1932 imports in each case?

Major ELLIOT: As regards beef, mutton and dairy produce, I have nothing to add to the answers given to my right hon. Friend by myself 23rd March and by my hon. Friend the Parliamentary Secretary to the Board of Trade 10th April. As regards bacon and hams, negotiations with the chief foreign exporting countries as to shipments to the United Kingdom during the three months ended 22nd June have proceeded on the basis of quantities of which I will circulate particulars in the OFFICIAL REPORT. The formal concurrence of most of the countries concerned has now been re-

Country.
March 23rd to April 22nd.
April 23rd to May 22nd.
May 23rd to June 22nd.
March 23rd to June 22nd.








Cwt.
Cwt.
Cwt.
Cwt.


Argentine
…
…
…
…
…
5,800
5,600
5,500
16,900


Denmark
…
…
…
…
…
487,300
474,700
462,100
1,424,100


Estonia
…
…
…
…
…
7,800
7,700
6,500
22,000


Finland
…
…
…
…
…
4,200
4,100
4,000
12,300


Latvia
…
…
…
…
…
4,000
3,700
3,600
11,300


Lithuania
…
…
…
…
…
38,000
37,000
36,000
111,000


Netherlands
…
…
…
…
80,500
78,400
76,400
235,300


Poland
…
…
…
…
…
77,500
75,500
73,500
226,500


Sweden*
…
…
…
…
…
36,700
35,700
34,700
107,100


U.S.A.
…
…
…
…
…
50,500
49,500
48,500
148,500


U.S.S.R.
…
…
…
…
…
4,000
4,000
4,000
12,000








796,300
775,900
754,800
2,327,000


*Subject to reasonable tolerance in view of short-shipments in previous months.

MEAT IMPORTS.

Mr. HERBERT WILLIAMS: 23.
asked the Minister of Agriculture whether, in view of the fact that the imports of both beef and mutton were much greater in March this year than in March last year, he will recommend the protecting of the live-stock industry by means of a tariff?

Major ELLIOT: I must remind my hon. Friend that imports of beef and mutton from foreign sources are regulated on a quarterly and not on a monthly basis, while, in the case of Australia and New Zealand, the present arrangements relate to the year 1933 as a whole. In these circumstances, no special significance attaches to the quantity of meat imported in any particular month. In point of fact, during the period November, 1932. to March, 1933, total imports of chilled and frozen beef were over 15,500 tons less, and of frozen mutton and lamb—most of which comes from the Dominions—were

ceived. The total maximum imports of bacon and hams during this period from the countries participating in the negotiations will be about 17 per cent. below the imports from the same countries in the June quarter, 1932.

Mr. T. WILLIAMS: Can the right hon. and gallant Gentleman give any idea of what these restrictions have cost the British consumer so far?

Major ELLIOT: I have given full particulars of the prices in the answer which I am circulating.

Following are the quantities:

about 1,000 tons less than in the period November, 1931, to March, 1932.

Mr. WILLIAMS: As the basis is a quarterly basis, can the Minister say why the imports of mutton during the first three months of this year were very much larger than during the first three months of last year?

Major ELLIOT: It is a little difficult to discuss this matter by means of question and answer, but, briefly, there was a very big reduction in the first quarter, apart from the quantities arranged.

Brigadier-General Sir HENRY CROFT: Is there any possibility of having a discussion of this question in the not distant future?

Major ELLIOT: That, too, is a question which ought to be addressed to the Leader of the House.

Oral Answers to Questions — INDIA.

INTERNATIONAL LABOUR CONFERENCE.

Mr. DAVID GRENFELL: 25.
asked the Secretary of State for India what steps the' Government of India propose to take to secure a full quota of Labour delegates from India to the International Labour Conference to be held at Geneva this year?

The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): I have every reason to suppose that India will be represented by a full delegation. The nominations are not yet complete.

SALARIES AND WAGES (ATTACHMENT).

Mr. D. GRENFELL: 26.
asked the Secretary of State for India what steps the Government of India propose to take with a view to implementing the recommendations of the Royal Commission on Indian Labour with reference to the present law relating to the attachment of salaries and wages?

Mr. BUTLER: The Government of India issued a circular letter to local Governments on 25th November last. Replies were asked for by 1st April and these will have to be considered before it is decided whether legislation is to be introduced.

Mr. GRENFELL: Can the hon. Gentleman say when he expects to get replies, and when he will be in a position to make a statement arising out of those replies?

Mr. BUTLER: If the hon. Member will put down a question later, I hope to be able to give him an answer.

FEDERATION OF ASSOCIATIONS OF GOVERNMENT SERVANTS.

Major MILNER: 27.
asked the Secretary of State for India whether he can state the reasons that have led to the refusal by the Government of India to recognise the Federation of Associations of Government Servants?

Mr. BUTLER: I have no information, but I am inquiring.

GOVERNMENT SERVANTS (PROVIDENT FUND).

Major MILNER: 28.
asked the Secretary of State for India whether the Government of India will consider the ad-
visability of instituting a system of relief by way of gratuities for the families of Government servants who have died during their term of service?

Mr. RHYS DAVIES: 32.
asked the Secretary of State for India what action the Government of India have under consideration with a view to the establishment of a provident fund for the benefit of Government employés.

Mr. BUTLER: These matters are at present under the consideration of the Government of India.

CO-OPERATIVE MOVEMENT.

Mr. RHYS DAVIES: 31.
asked the Secretary of State for India whether the Government of India will consider the advisability of renewing the publication of the annual review of the co-operative movement in British India?

Mr. BUTLER: I will communicate the hon. Member's suggestion to the Government of India.

Mr. DAVIES: Will the hon. Gentleman take note of the fact that to leave out details of the co-operative movement in India amuses suspicion among co-operatives in this country that the Government of India are a little hostile to the cooperative movement?

Mr. BUTLER: I do not think the hon. Member need assume anything of the sort. It is for that reason that we are communicating his suggestion to the Government of India.

Mr. HANNON: Is it not a fact that for a great many years past the Government of India have assisted the co-operative movement in India by every means in their power?

Mr. BUTLER: Yes, Sir.

SEA CUSTOMS ACT.

Mr. McENTEE: 29.
asked the Secretary of State for India whether, in view of the representations made to the Government of India by the Indian Chambers of Commerce with regard to the mode of assessment of certain articles under the Sea Customs Act, he can state if it is the intention of the Central Board of Revenue to change the assessment of any articles and, if so, which from the invoice value to the wholesale cash price?

Mr. BUTLER: I have no information, but an inquiry will be made if the hon. Member will specify the articles in which he is interested.

LAND REVENUE.

Mr. McENTEE: 30.
asked the Secretary of State for India whether he will consider the advisability of asking the Government of India for a report as to the prevalence of the custom of attaching paddy and other crops and property of ryots in respect of the recovery of land revenue?

Dr. JOHN WILLIAMS: 33.
asked the Secretary of State for India whether he can state in what provinces remissions of land revenue have been made; and what is the amount of the reduction in each case?

Mr. BUTLER: A report will be asked for on the matters dealt with in these questions.

BANKERS (EXPULSION).

Dr. J. WILLIAMS: 34.
asked the Secretary of State for India what action the Government of India propose to take with regard to orders of expulsion made by the Government of Indo-China against bankers from India?

Mr. BUTLER: Representations have been made on behalf of the Government of India by the British Ambassador in Paris to the French Government.

CINEMA INDUSTRY (WORKING WEEK).

Mr. REMER: 35.
asked the Minister of Labour whether, in view of the resolution forwarded to him by the Trades Union Congress, supporting in the cinema industry a basis of a 60-hours working week, exclusive of meal times, the Government will consider whether it is advisable to continue the international discussions for a 40-hours working week?

The MINISTER of LABOUR (Sir Henry Betterton): I have not received a resolution from the Trades Union Congress, and I am not aware that such a resolution has been passed. I understand, however, that the London and Home Counties Joint Conciliation Board for the Cinema Industry, upon which certain trade unions are represented, have agreed to recommend that the working
week in London and the Home Counties shall not exceed 60 hours for the general staff, 54 for the female staff and 55 for the operators, with extra payment for overtime. Discussions on the subject of the 40-hour week must, of course, take into account the circumstances of the various industries and the agreements reached by the organisations which are representative of those concerned.

Mr. REMER: Does not the right hon. Gentleman receive at regular intervals the proceedings of the Trades Union Congress?

Viscountess ASTOR: Can the right hon. Gentleman do anything about the agreement on a 60-hour week, particularly as it includes juveniles?

Sir H. BETTERTON: With regard to the first question, I am not sure I can answer it. I receive from time to time information of some of the resolutions that the Trades Union Congress pass, but I am not at all sure that I receive them all.

Mr. LAWSON: Can the right hon. Gentleman tell us what are the average hours in this industry now? Have there not been investigations?

Mr. THORNE: Is the right hon. Gentleman not aware that the Trades Union Congress has never passed such a foolish resolution?

Sir H. BETTERTON: I have answered that question already. I said that I had not received such a resolution, and I am not aware that such a resolution was passed.

Mr. RHYS DAVIES: In view of the promises made by the owners of cinema houses in this country when the Sunday Entertainments Act was passing through this House, will the right hon. Gentleman see that their promises are implemented?

Sir H. BETTERTON: That question should be addressed, not to me, but to my right hon. Friend the Home Secretary.

Mr. REMER: Will the right hon. Gentleman look through the proceedings of the Trades Union Congress and confirm the statement in my question that they have passed such a resolution?

Sir H. BETTERTON: No. I will not give any such undertaking.

Mr. KIRKWOOD: Is the Minister not aware that in the House of Representatives in America last week they passed a Bill for 30 hours a week?

Sir H. BETTERTON: No. I am not aware of that fact.

UNEMPLOYMENT INSURANCE.

Captain P. MACDONALD: 26.
asked the Minister of Labour whether it is proposed to introduce a Bill dealing fully with the recommendations of the Royal Commission on Unemployment Insurance during the coining Session of Parliament; and, if so, when the Bill may be expected?

Sir H. BETTERTON: The Government intend to introduce legislation on this subject this Session. I am not yet in a position to give the date.

Oral Answers to Questions — RUSSIA.

BRITISH SUBJECTS (TRIAL).

Mr. LEWIS: 37.
asked the Secretary of State for Foreign Affairs, if he has any further statement to make with regard to the employés of the Metropolitan-Vickers Company who have been arrested in Russia?

Mr. D. GRENFELL: 43.
asked the Secretary of State for Foreign Affairs whether he has any further statement to make on the trial of the British subjects at Moscow?

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): Four of the six Metro-Vickers engineers who have recently been on trial at Moscow arrived in London on 23rd April. As the House is aware, one of them, Mr. Gregory, was acquitted and the other three, Mr. Monkhouse, Mr. Cushny and Mr. Nordwall were convicted and sentenced to banishment from Russia for five years. The other two men, Mr. Thornton and Mr. Macdonald, were convicted and sentenced to deprivation of liberty for three years and two years respectively. Both Mr. Thornton and Mr. Macdonald are, I understand, lodging appeals for commutation of sentence; Mr.
Thornton's appeal was in fact presented last Friday and I understand that both appeals will in due course come under the consideration of the Central Executive Committee of the Soviet Union.
The four engineers who have already arrived in England have been interviewed at the Foreign Office and insist most strongly that their two comrades who are still detained are as completely innocent as they are themselves. Having seen the four men myself, I am completely convinced that the accusations against them were ill-founded and that the action of His Majesty's Government in relation to the whole matter is entirely justified.

Mr. LEWIS: Can my right hon. Friend give us any idea when these appeals are likely to be heard?

Sir J. SIMON: No, Sir.

Mr. LANSBURY: May I ask the Leader of the House whether there will be any early opportunity of debating the action taken by His Majesty's Government?

The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): I think it is a little premature to put that question.

Mr. LANSBURY: I understand that the embargo which His Majesty's Government have imposed under the Act will come into operation to-morrow. In these circumstances, does the right hon. Gentleman think it early to ask for a day to debate so important a question?

Mr. BALDWIN: I cannot think that a debate would be of any help while our fellow-countrymen are in prison.

Mr. LANSBURY: That may be the opinion of the right hon. Gentleman—[HON. MEMBERS: "And the country"]—and of a majority of this House. [HON. MEMBERS: "And the country."] That remains to be seen. I wish to press the right hon. Gentleman. There is no danger to our countrymen in this House debating a matter of this kind, which is of great importance to a very large number of people in this country, and I again ask if the right hon. Gentleman will give us facilities to debate it?

Mr. BALDWIN: The responsibility for a decision of that kind must rest with His Majesty's Government.

Mr. THORNE: Can the right hon. Gentleman say whether the four men in question came in at one and the same time to the Foreign Office, or whether Gregory was sent for afterwards?

Sir J. SIMON: I really do not know the order in which they came. They were received all together.

Mr. THORNE: The point I put was whether the four men came together, or whether three of them came along and Gregory was sent for afterwards?

Sir J. SIMON: I would answer the hon. Member immediately if I could give him an answer. I really do not know, but I do know that at one time or another all four gentlemen came to the Foreign Office, and at one time they were certainly seen together.

TRADE RELATIONS.

Captain P. MACDONALD: 46.
asked the Prime Minister what action the Government proposes to take with regard to Russian trade, following the expiration of the Russian trade treaty on 17th April last?

Mr. BALDWIN: I am not in a position to make any statement at the present time. My hon. and gallant Friend is no doubt aware that negotiations, which were in progress with a view to a new agreement, were suspended following the recent arrests in Moscow.

GERMANY: BRITISH SUBJECT (ARREST).

Mr. LEWIS: 38.
asked the Secretary of State for Foreign Affairs if, since the arrest of Mr. Fraser on 4th April, he has had any further complaints of the arrest of any British subjects in Germany?

Sir J. SIMON: Yes, Sir, the Foreign Office learned on the 19th April of the arrest at Regensburg in Bavaria of a British subject, a Mr. Wilfred Howard, a teacher of English in that city. I believe that the offence complained of was a breach of the law concerning statements derogatory to the administration in letters sent through the post. His Majesty's Consul-General at Munich was at once instructed to make inquiries, and the case was also brought to the notice of His Majesty's Ambassador at Berlin.

Mr. COCKS: Can the right hon. Gentleman say what has happened to Mr. Fraser, who has been 21 days now without being brought to trial? Will the British Government protect this subject?

Sir J. SIMON: I must ask for notice of that question.

SOUTH AMERICAN STATES (HOSTILITIES).

Mr. MANDER: 39.
asked the Secretary of State for Foreign Affairs the present position with regard to the disputes in South America between Bolivia and Paraguay and Colombia and Peru?

Sir J. SIMON: Hostilities between Bolivia and Paraguay in the Chaco area are still continuing. In my reply to my hon. Friend's question on this subject on the 27th of February I stated that fresh proposals were under consideration between the Governments of the neighbouring countries. These have been submitted unofficially to the Bolivian and Paraguayan Governments, and negotiations on this basis are proceeding. As regards the second part of my hon. Friend's question, I should explain that hostilities between Peru and Colombia are not at the moment taking place. The advisory committee appointed by the council of the League of Nations is following the dispute, and negotiations have been proceeding on the basis of the council's proposals of the 25th of February, and of the report and recommendations adopted by the council on the 18th of March, which it is hoped may render possible a peaceful settlement of the dispute. His Majesty's representatives at Lima and Bogota have been actively supporting the council's recommendations.

CHINA AND JAPAN.

Mr. MANDER: 40.
asked the Secretary of State for Foreign Affairs if he has any statement to make with regard to the position in the Far East; and whether any action has recently been taken by the League of Nations Advisory Committee in conection with the subject?

Sir J. SIMON: On the 17th of April the Japanese military authorities announced that Chinwangtao had been evacuated by the Chinese troops and occupied by Japanese railway guards.
Japanese or Manchukuo troops were also reported to have occupied Anshan, a station on the Peking-Mukden railway west of Changli.
In reply to an inquiry addressed to him on my instructions by His Majesty's Chargé d'Affaires at Tokyo, the Japanese Minister for Foreign Affairs stated, on the 21st April, that the Japanese advance within the Wall had been made necessary by what he described as provocative action on the part of the Chinese, but added that the Japanese had no intention of advancing beyond the Luan River unless they were forced to do so by further provocations. As soon as the situation was settled the Japanese troops would be withdrawn outside the Wall. The Advisory Committee of the League of Nations on the Sino-Japanese dispute appointed, on the 15th of March, two subcommittees, one to consider the problem of the exportation of arms to the Far East, and the other to make recommendations as to the manner in which effect should be given to the recommendation of the Assembly that no recognition should be extended to the present de facto situation. I am informed that the Secretariat of the League is actively engaged in collecting the material for the consideration of the latter sub-committee. As regards the first sub-committee I have nothing to add to the reply given to the hon. Member for Westhoughton (Mr. R. Davies) on the 29th of March last.

EUROPEAN SITUATION (CONVERSATIONS).

Mr. MANDER: 41.
asked the Secretary of State for Foreign Affairs the present position with regard to negotiations for a Four-Power Pact as instituted at Rome?

Mr. MORGAN JONES: 44.
asked the Secretary of State for Foreign Affairs whether any progress has been made with the proposal for a Four-Power Pact which was initiated in conversations in Paris and Rome; and whether he can make any statement on the matter?

Sir J. SIMON: Conversations are still proceeding, but I do not think that I can, for the moment, usefully add anything to the statement which I made in the House on the 13th of April.

Sir AUSTEN CHAMBERLAIN: May I ask my right hon. Friend when he expects to lay the White Paper that he promised?

Sir J. SIMON: I am, of course, keeping that promise very carefully in mind, but I think that on the whole it would be better if we had the papers in rather more complete order than they are at present. I have said that conversations are still proceeding, and we have no idea of reaching a definite conclusion without first placing a White Paper before the House.

Sir A. CHAMBERLAIN: Will the right hon. Gentleman bear in mind that the Prime Minister—I do not know whether to say warned or reproached us for making speeches based upon assumptions, but until the Government supply information we have nothing hut assumptions on which to found an opinion?

Sir J. SIMON: I agree with my right hon. Friend, and I am sure that he will believe me when I say that I am not withholding it for any other reason than that at the moment the negotiations are proceeding, and it would be a very truncated document if it were communicated now.

Mr. HANNON: In view of the answers which the right hon. Gentleman has given to the last three questions, will he consider the propriety of sending the hon. Member for East Wolverhampton (Mr. Mander) to some remote place to settle these disputes?

LEAGUE OF NATIONS (NEW BUILDINGS, GENEVA).

Mr. H. WILLIAMS: 42.
asked the Secretary of State for Foreign Affairs whether he is now in a, position to supply further information in respect of the discrimination against British firms in connection with the contract for the electrical installation at the new buildings of the League of Nations at Geneva?

Sir J. SIMON: I have made further inquiries and I am informed that the specifications for the electrical installation contain no reference to German or Swiss firms by name, although it is true that certain essential parts of the equipment, which must, of course, conform to Continental practice, are in fact made only by such firms. I am, however, also
informed that certain British firms have experienced no difficulty in obtaining quotations for these foreign specialities. It is clear, therefore, that British firms, as such, are not debarred from submitting their tenders for the electrical installation.

Oral Answers to Questions — UNITED STATES.

PRIME MINISTER'S VISIT.

Mr. LEWIS: 45.
asked the Prime Minister if he has any statement to make on the subject of his visit to the United States of America?

Mr. COCKS: 47.
asked the Prime Minister if he has any statement to make regarding his visit to the United States of America?

Mr. BALDWIN: Perhaps hon. Members will be good enough to await the return of my right hon. Friend.

Mr. LEWIS: Can my right hon. Friend in the meantime assure the House that we shall in no circumstances be committed to the re-adoption of the Gold Standard while the question of War Debts remains unsettled?

Mr. BALDWIN: I think that it is within the recollection of the House that the Prime Minister gave an assurance before he went to America that we shall not be committed to anything.

BRITISH DEBT.

Mr. MABANE: 52.
asked the Chancellor of the Exchequer whether he can now make any statement with regard to the debt payment due to be made to the United States of America on 15th June?

Mr. HORE-BELISHA: No, Sir.

WORLD ECONOMIC CONFERENCE.

Mr. LUNN: 48.
asked the Prime Minister whether he now has any statement to make with regard to the forthcoming World Economic Conference?

Mr. BALDWIN: I am not at the moment in a. position to make any such statement.

Mr. LUNN: When is the right hon. Gentleman likely to be in a position to make any statement?

Mr. BALDWIN: I hope on the return of the Prime Minister.

INSTITUTE OF BOTANO-THERAPY.

Mr. TINKER: 53.
asked the Minister of Health what steps he proposes to take, in view of the communication addressed to him from the secretary of the Institute of Botano-Therapy asking for a legal status to be given to qualified practitioners of the Botanic School of Medicine?

The MINISTER of HEALTH (Sir Hilton Young): The letter to which the hon. Member refers was received in my Department late yesterday afternoon. I will send the hon. Member a copy of my reply in due course.

Mr. TINKER: Will the right hon. Gentleman consider receiving a deputation from this body, which is doing a good work?

Sir H. YOUNG: Perhaps the hon. Member will give me an opportunity of considering the letter.

CEYLON (MEDICAL SERVICE).

Mr. RHYS DAVIES: 54.
asked the Secretary of State for the Colonies whether, in view of the fact that the Government have been in consultation with the British Medical Council with regard to the qualifications of those entering the Government medical service in Ceylon, he will bring the matter to the consideration of medical practitioners in Ceylon before any decision is taken?

The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Malcolm MacDonald): I am not aware that the qualifications of persons entering the Government medical service in Ceylon have been discussed recently with the General Medical Council. The Ceylon Government has, however, had under consideration the recommendations made by Sir Richard Needham, who reported on behalf of the General Medical Council on the technical education provided by the Ceylon Medical College, and the council have been informed of the measures which the Ceylon. Government contemplates in furtherance of those recommendations. The extent to which medical practitioners in the Island 'are to be consulted regarding such measures is a matter for the Island Government to decide.

FEDERATED MALAY STATES (LAND SETTLEMENT).

Mr. PARKINSON: 55.
asked the Secretary of State for the Colonies whether His Majesty's Government will consider the advisability of requesting the Government of the Federated Malay States to draft a land settlement scheme with free housing sites for Indian labourers?

Mr. M. MacDONALD: My right hon. Friend will be pleased to forward any concrete proposals to the High Commissioner for consideration, but owing to the financial position of the Federated Malay States Government, it is feared that new expenditure must be strictly limited.

RUSSIA (TRADE RELATIONS).

Mr. LANSBURY: I beg to ask leave to move the Adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely:
the imposition by His Majesty's Government of an embargo on Russian imports into this country to operate as from tomorrow morning.

Mr. SPEAKER: I am sure that the right hon. Gentleman will see that Standing Order No. 10 cannot apply to a Motion of this kind. The embargo is due to an Act of Parliament put into execution by the Government after definite action which the House has approved.

Mr. LANSBURY: Do I understand that by that Act of Parliament all control of the Government's action in respect of that Act is removed from the House?

Mr. SPEAKER: No, the right hon. Gentleman must not understand that at all. It means that it cannot be discussed under Standing Order No. 10 on a Motion to move the Adjournment of the House on a definite matter of urgent public importance.

Mr. LANSBURY: If your Ruling be correct, it means that His Majesty's Government can withhold and prevent any discussion by this House on this subject at all until they choose, and I suggest that on a matter of such genuine urgent public importance to tens of thousands of our citizens this House has a right to choose when it shall discuss it.

Mr. SPEAKER: No doubt the House has a perfect right to choose when it may discuss some particular Motion. All that I ruled was that this case could not come under that particular Standing Order.

BUSINESS OF THE HOUSE.

Ordered,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).—[Mr. Baldwin.]

FINANCIAL STATEMENT (1933–34).

Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by Mr. Chancellor of the Exchequer when opening the Budget."—[Mr. Hore-Belisha.]

Copy presented accordingly; to lie upon the Table, and to be printed.

HUMANE SLAUGHTER OF BOVINE ANIMALS BILL.

Order for Second Reading upon Friday read, and discharged; Bill withdrawn.

Orders of the Day — WAYS AND MEANS.

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

FINANCIAL STATEMENT.

3.22 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I rise this afternoon to open my second Budget and to make a statement which, as I read in the daily papers, is eagerly awaited. That, I fancy, is not an uncommon preliminary with a Budget statement, but before I proceed to confirm or confound the prophets, who have as usual been busy with their forecasts, I am sure that the Committee will desire me to follow the customary practice and to give them some account of the financial transactions of the year which has just closed. On every Budget day the Chancellor of the Exchequer must perforce himself enter the ranks of the prophets, and must look into the seeds of time and see which.grains will grow and which will not; and if, like myself, he has held office for more than a year, he must compare the anticipations which he formed 12 months before with the actual results, and must draw what lessons he can from the discrepancies and from the agreements before he prophesies again. During the post-War years there have been some very wide differences between estimates and achievements, both in sum and in detail. Although to-day I have not to report so wide a gap as has from time to time appeared during that period, nevertheless the differences are sufficiently great to indicate bow difficult it has become in these times to forecast with any accuracy what is going to be the course of events. It would seem to be almost as difficult, when they are over, to arrive at a just computation of what they are, for although it is certain that the year for which I estimated a Budget surplus of £800,000 has closed with a deficit, I have seen that deficit variously estimated at £3,000,000, £6,000,000, £8,000,000, £11,000,000 and £32,000,000. However the deficit is calculated and although, of course, everybody would have much preferred to see a surplus, I think the out-turn of the financial year, achieved as it
has been in the teeth of all the shocks and strain to which the financial position of this country has been subjected, may well afford us more solid satisfaction than we derived from the contemplation of some of the surpluses which were earned with so little effort in earlier and more prosperous times.

REVIEW OF PAST YEAR.

My first task, then, is to establish the amount of the deficit, and to see how it has been brought about. I can summarise the result in round figures as follows:



£


The actual expenditure, including the Fixed Debt Charge and the payment of the War Debt instalment to the United States Government, was
777,000,000


The actual revenue was
745,000,000


leaving a Budget deficit of
32,000,000


or, to give the exact figures
32,278,989

That is the Budget deficit for the year, the figure which will appear in the official published account. Under the Finance Act of 1930 it would fall to be made good in the year 1933, but I propose to follow the example of my Noble friend Lord Snowden, who himself in the following year considered that it was unnecessary, in the circumstances then existing, to maintain so austere and so exacting a standard of financial purity; consequently the deficit will be met by borrowing. I would like at this point to call the attention of the Committee to the fact that this deficit includes the payment to the United States of £28,900,000. Without that the deficit would only have been £3,300,000. Moreover, it includes £17,250,000 for Sinking Fund. If we set off against that a sum of £2,656,000 borrowed on account of the interest on Savings Certificates, to which I shall make allusion later, we have a net redemption of Debt of £14,600,000; and, if we exclude the American Debt, we had during this past year a surplus of current revenue over current expenditure of approximately £11,250,000. I think it is all the more desirable to call attention to these figures, because sometimes comparisons are made with Budgets in other countries in which no account is taken of the redemption of Debt.

Now let us consider how this has been brought about. Instead of a total
revenue of £766,800,000 I received only £744,791,000, a shortage of just over £22,000,000. Customs and Excise, instead of resulting in a revenue of £300,000,000, resulted only in £288,135,000, leaving a deficit of nearly £12,000,000. I should point out that the deficit is really larger than those figures seem to indicate, because the original Budget estimate did not include the duties which were levied upon imports from the Irish Free State under the Special Duties Act which became operative in July, nor did it include the changes effected by the Ottawa Agreements, which became operative in November. From the Irish Free State Duties, including a small amount under the Import Duties Act to which some of the imports were liable, I received £2,500,000, and from the Ottawa Duties £1,750,000. I should say that probably more than half of the latter figure would have come in under the original Import Duties, if these had not been altered at Ottawa. Altogether, if it had not been for those two additional items, the deficit on Customs and Excise would have been something over £15,000,000.

These decreases in revenue were not universal. There were substantial surpluses of revenue from oil, spirits and tea. On the other hand, there were two serious disappointments. The revenue from beer was £6,000,000 below my estimate, and at £73,750,000 has given me the lowest yield that has been received for 13 years.

Viscountess ASTOR: I am not surprised.

Mr. CHAMBERLAIN: Then I had estimated that I should receive from the New Tariff Duties £32,000,000—£27,000,000 from the Revenue Tariff and a further £5,000,000 from the Additional Duties. At the time when I made that estimate, the Revenue Tariff had only been in operation for a month and the Additional Duties had not come into force at all. Therefore, in my Budget speech I informed the Committee that any estimate which was made must be of a highly conjectural character. In the end, the actual revenue which I received was just under £22,000,000 and allowing, as one should, another £1,000,000 for the duties which were afterwards merged into the Ottawa Duties, we may say that the actual shortfall was £9,000,000 upon this item. That I put down partly to a fall in prices, but
mainly to the fact that we were much more successful than I had anticipated in checking foreign imports. Therefore, while I was naturally disappointed at not receiving the revenue which I had anticipated, yet I take a certain consolation from the fact that the adverse balance of trade was checked, and no doubt that has had its reactions upon the internal sources of revenue.
The deficiency of Customs and Excise was materially added to by the shortfall of Inland Revenue, from which I got £411,519,000, or a drop of £15,500,000 on my estimate. I expected to get an increase of £6,000,000 in the Stamp Duties and £11,000,000 in the Death Duties. Actually I got only £2,000,000 extra out of Stamp Duties, but on the other hand my estimate of the Death Duties, which was thought at the time to be too optimistic, proved to be justified for in fact I got £1,000,000 more than I expected. Surtax I estimated at £66,000,000, which was £11,000,000 less than we received in 1931, but my estimate proved too high by £5,000,000. From Income Tax I expected £260,000,000; I got only £252,000,000. The great decline in Surtax reflects a big decline in personal incomes. It is not due to any slackness of assessment, nor to any falling back in payment of those who were liable, but, to show the Committee to what an extent decline has taken place, I may mention that no less than 12,000 persons, who had been liable to Surtax in 1931, were found in 1932 to have dropped below the level at which liability to Surtax would fall upon them.
The deficiency of £8,000,000 in Income Tax might perhaps be thought to throw some doubt upon the reliability of the estimates which I have made. I may point out that there are three factors which enter into the collection of Income Tax. There is the collection of the current year's charge, there is the collection of arrears, and then, on the other side, are repayments which from time to time have to be made. As a matter of fact, the method which we are now able to employ in estimating the current year's charge, which of course is much the largest item, admits of very great accuracy, and during this last year the error in that particular item turned out to be less than I per cent. The deficiency is almost entirely due to a
drop in the arrears which were collected, which fell below the estimate by £7,000,000. That, in turn, must be largely ascribed to the patriotic action of the taxpayers in the year before, who not only paid their taxes with an extraordinary punctuality, but so greatly facilitated the assessments that there was very little left to assess or collect in the year following. Once again, therefore, even though I have to record some disappointment in not realising the amount of revenue which I expected, I can take consolation in the thought that that deficiency was due, not to unwillingness on the part of the taxpayer to meet his obligation, but rather to a greater readiness to do his duty by the country in a crisis than even I had anticipated.
The other items in the revenue are less important, but they were more satisfactory. The net Exchequer receipts from the Post Office fell short by £800,000, but on the other hand Sundry Loans and Miscellaneous Revenue gave me an increase of £6,250,000, while Motor Vehicle Duties and Crown Lands revenue fulfilled my expectations.
Let us see what happened with the other side of the account. The Committee will remember that, to the original estimate for Supply Services of £447,204,000, we had to add Supplementary Estimates of £21,614,000. The great bulk of that extra expenditure, no less than £18,000,000, must be laid at the door of unemployment. It proved that we had been too optimistic in hoping that the level of unemployment would continue to fall. The remainder, namely, about £3,500,000, was due mostly to the default of the Irish Free State. In the end, however, we did not require the whole of the supplementary sums voted. There was a saving of £4,500,000 on unemployment, and another saving of £1,500,000 on the Road Fund, and further economies extending over a large number of Departments brought up the total saving to £10,500,000 on the enlarged estimate. That left us with a total net expenditure of £458,250,000 on Supply Services.
With regard to the Fixed Debt Charge, the Finance Act, 1932, restricted the Fixed Debt Charge to £308,500,000. That included the statutory requirement for Sinking Fund of £32,500,000, and the re-
mainder, £276,000,000, was what was estimated to be necessary for the interest and management of the National Debt. But these calculations were upset completely in the course of the year by two developments of major importance, one on the credit side and the other on the debit side. In the first place, the rise in gilt-edged securities following the War Loan Conversion reduced by nearly one-half the statutory Sinking Fund requirement, and the cost of interest was also materially reduced by operations supplementary to the main Conversion Loan. By the beginning of December we were in a position to forecast that the savings under these two heads would be over £26,000,000, which would be available for the redemption of debt. But, on the 15th December, we found ourselves obliged to make provision for a payment of 95,000,000 dollars to the United States Government, equivalent to nearly £29,000,000 sterling, for which no provision had been made in the Budget. As I explained in the Debate in the House on the 14th December, it was decided that this expenditure should be met out of Budget revenue, that is to say, that it should be provided out of the Fixed Debt Charge; and the result. of that was that the whole of the savings to which I have alluded were absorbed, and, in addition, it became necessary to borrow the sum of £2,656,000 on account of interest on National Savings Certificates under the authority of Section 29 of the Finance Act, 1928.
The final apportionment of the Fixed Debt Charge, apart from the American Debt is: Interest and Management, £262,250,000, and Sinking Fund, £17,254,000, making a total of £279,500,000; and, adding to that the £29,000,000 paid to the United States, we have the statutory figure for the Fixed Debt Charge of £308,500,000. I can summarise my account of the Budget deficit as follows:
We have:


A net shortage of revenue of
£22,000,000


An increased expenditure of
£11,000,000


A payment to the United States of
£29,000,000


Adding up to
£62,000,000


From that we can deduct:


Savings in interest on Debt and in reduction of the Sinking Fund to £17,250,000, making together, in round figures
£29,000,000


Leaving a net deficit of
£33,000,000


or, making allowance for the estimated Budget surplus of £800,000, a Budget deficit of £32,200,000.
As I have been speaking of the American Debt, I might here say a word about the general position of Reparations and War Debts. As the Committee are aware, under the Lausanne Agreement we suspended the payment of certain Reparations and War Debts which were due to us. What those were will be found in a new table in the Financial Statement. For the present they remain in suspense, but sooner or later, no doubt, a final settlement will be made which will determine their disposition as well as that of our own debt to the United States of America.

NATIONAL DEBT.

Before I leave the past year, I will, as usual, give the Committee a brief notice of the position as regards the National Debt. Apart from the payment to America, the £17,250,000 allocated to the Sinking Fund, together with certain minor items applicable to debt redemption, amounting altogether to £730,000, was used to cancel debt of a, nominal value of £18,562,000. Against this we must set three items, namely, a Budget deficit of £32,279,000, the £2,656,000 which we borrowed for interest on Savings Certificates, and the sum of £23,175,000 borrowed, under Section 17 of the Finance (No. 2) Act, 1931, to meet the expenses of the Conversion Loan, and, in particular, the cash bonus.

The great increase in the Floating Debt during the year has been partly owing to these items which I have just mentioned, but mainly to the creation of the Exchange Equalisation Fund. As soon as we formed that fund, it was credited with the full amount of £150,000,000, and, of course, the State has acquired assets corresponding to that sum. The Floating Debt of £810,000,000 is nearly £200,000,000 above what it was last year, and, in spite of the abnormally low rate of discount at which Treasury Bills can now be sold, I thought it advisable to take advantage of
the present cheapness of money gradually to convert a portion of this balance into a longer-term security in the shape of the new 2½ per cent. Conversion Loan which is now being offered for tender weekly. The consolidation of our position which that will give us will repay us for any extra interest charge that may be involved.

Students of finance often note that changes in the nominal amount of the Dead-weight Debt do not really represent changes in its true burden. That is very clearly illustrated by what has happened during the past year. We have had a very considerable, but very misleading, increase in the amount of the nominal Dead-weight Debt, but, at the same time, we have laid the foundations for a very substantial decrease in the annual charge for the service of the debt, a decrease which will enter into the accounts of the present year. The total interest saving this year will amount to upwards of £52,000,000, or virtually a decrease of 20 per cent., and, although part of that is, no doubt, due to the present abnormal cheapness of short money, which in the nature of things cannot be expected to go on for ever, I think one may say safely that a very large part of it represents a permanent gain which has been due to the conversion of the War Loan and to the further operations which followed upon that great conversion. If you consider the price of Government securities at present, it points in the same direction. I will give some rather interesting figures to show the yield on a purchase of British Government securities 12 months ago as compared with to-day. On a funded stock 12 months ago the yield was £4 3s. per cent. To-day it is £3 9s. 7d. per cent. On a medium-term redeemable loan it was £4 6s. 9d. a year ago. To-day it is £3 8s. On a two-years bond to-day it is £2 3s. compared with £3 6s. 10d. a year ago. On Treasury Bills, the rate on which a year ago was £2 2s., to-day the rate is 9s. 6d. I venture to ask Members of the Committee to consider carefully whether we could have secured these immense financial benefits if we had not insisted upon a balanced Budget.

Taking leave of the year that has passed, I think we may say it is one of substantial achievement. Holders of fixed interest securities have made their
contribution to the economy of the nation. Thereby they have helped to provide one of the essentials preliminary to a revival of business activities. The sacrifices which have already been suffered have been borne with a patience which has excited general admiration and, in spite of the continued shrinkage of international trade and the continued high level of unemployment, the purchasing and saving power of the people has been maintained to a very remarkable degree. The Post Office deposits, for instance, last year rose by upwards of £16,000,000 and those in the Trustee Savings Banks by £11,750,000, which seems to me to be a very striking demonstration of the persistence of the habit of saving among our working people in these hard times. If I take, for example, three of the most important dutiable articles of working-class consumption, namely, tea, sugar and tobacco, I find that, in spite of the new duties, consumption of tea per head last year at 10.55 lbs. was higher than it has ever been before. The consumption of sugar at 91.67 lbs., though less than in 1931 when it reached the abnormal figure of 96.14 lbs., but again with that one exception, was higher than in any previous year. Even in the case of tobacco, which must be regarded as a luxury rather than a necessity, the consumption at 3.23 lbs., although rather lower than in 1931 or 1930, is still higher than in any year prior to 1929. I doubt very much whether figures similar to that could be produced in any other industrial country in the world.

ESTIMATES FOR 1933–34.

So much for 1932. Now I come to 1933. I. must begin, as I did last year, with a word or two about War Debts and Reparations. In this year, 1933–4, we should under the Agreements with the United States Government of 18th June, 1923, and 4th June, 1932, be liable to make payments amounting to $193,500,000, equivalent at the rate of exchange which was current on Saturday last to £51,000,000 sterling. Against this we should receive in Reparations £32,500,000, in Allied War Debts £19,500,000, in Dominion War Debts, Relief Debts, etc., £12,500,000, making a total of £64,500,000. It must be obvious that none of these figures, whether representing assets or liabilities can be said yet to be in a
fixed or final form. Therefore, I propose this year to adopt the same procedure as I did last year and make no provision either for payments to America or for receipts from other countries to ourselves.

I have already spoken of the savings which we have made in the interest on the Debt. Coming to Consolidated Fund Services, the figure estimated as required for interest and management this year is only £224,000,000. Northern Ireland Services are put at £6,750,000, and Miscellaneous Services at £3,550,000. The Sinking Fund I will deal with later. Leaving that aside, the total for the Consolidated Fund Services comes to £234,300,000.

Then I turn to the Supply Services, the figures of which are already before the Committee. I have to provide for an increase of £4,500,000 for the Defence Services as compared with last year. Last year very drastic cuts were made, and it was always recognised that those cuts could not be maintained without seriously impairing the efficiency of the Defensive Forces of the Crown. But, even so, the provision made for defence this year is £1,500,000 less than we made in 1930, and it is nearly £4,000,000 less than in 1929. The Civil Estimates total £319,271,000, and the Committee is aware that those figures do not include a full year's provision for unemployment, and, therefore, they are not comparable as they stand with the figures for last year, but, excluding the Ministry of Labour and the Unemployment benefit, they show a reduction on the final Estimates for 1932, including Supplementaries, of £3,678,000. The published Estimate for the Ministry of Labour is based on the fact that the statutory authority for transitional payments expires on 30th June. It has already been announced that legislation will subsequently be introduced to extend the period and, of course, a Supplementary Estimate will in due course have to be presented. Meantime, I estimate that to complete the provision for the full year we shall require another £22,500,000. The self-balancing items call for no particular comment. The Post Office stands at £59,439,000 and the Road Fund at £23,000,000.

Omitting the self-balancing items but including the £22,500,000 required for the Ministry of Labour, the total Supply Services come to
£463,186,000.


Adding to that the Consolidated Fund Services at
£234,300,000,


we obtain a grand total of ordinary expenditure, apart from Sinking Fund, of
£697,486,000.

EXPENDITURE.

In view of certain criticisms which have been made on the subject of expenditure, I am going to ask the Committee to contrast that figure with the position which existed two years ago. At that time when the Estimates were presented in April, 1931, our ordinary expenditure, leaving out interest on the American Debt for purposes of comparison, was set down at £724,000,000. We were then borrowing for unemployment at the rate of £1,000,000 a week, and we were making provision to borrow £9,000,000 for the roads. So that our total ordinary expenditure then was at the rate of £785,000,000. This year the estimate is £697,000,000, a reduction of £88,000,000. That is not all. I have to provide now for the default of the Irish Free State. I have also to provide for the automatic increase of Old Age and Widows' Pensions, housing and unemployment grants. I have to provide for the continued, or rather the increased, burden of unemployment. I estimate that this group of items, after taking account of the fall in War pensions, will cost me £25,000,000 more in 1933 than we had to find in 1931.

So that the position is that not only have we actually saved in expenditure £88,000,000, but we have also absorbed another £25,000,000 which otherwise would have meant an increase in our expenditure. In other words, the real saving to-day as compared with the estimated position of two years ago amounts to £113,000,000. Of that £113,000,000, £52,000,000 is due, as I have already pointed out, to the saving on interest, and £61,000,000 to economies in other directions. Every Chancellor knows what difficulties there are in securing economies, and that the more economies you have made the more difficult it is to obtain further ones. At the same time, I shall always welcome helpful and
suggestive criticism on this subject, but I must say that if critics are to be listened to with respect, they must not disregard the enormous savings already made by the Government, and must not leave out of account the fact that every Chancellor of the Exchequer has to make provision for those automatic increases which arise out of various existing Acts of Parliament.

REVENUE.

I will now give the Committee my estimates of Revenue on the basis of existing taxation. Taking first the Beer Duty, I cannot expect that the downward trend that has been such a marked feature of recent years will cease to operate, and I must therefore allow for a further fall. I have put down beer on the existing basis at £68,000,000, against £74,000,000 which I received last year. I expect a further drop in spirits at £33,000,000, and I must also take account of a substantial decline which I anticipate will take place in the Liquor Licence revenue, owing to the drop in the valuations on which the Licence Duties depend, arising out of the diminishing consumption. I expect a small rise in the yield from sugar of £370,000, but that is only because the sugar revenue last year was diminished by reason of fore-stalments which had taken place in the year before. As a matter of fact, I had to reduce my estimates of revenue both from sugar and from tobacco on account of the increasing cost of the respective Imperial Preferences which diminish my revenue but at the same time are fulfilling the purpose for which they were given, namely, increasing Empire trade in these products.

When I come to the Import Duties, I no longer have to estimate separately for abnormal imports and horticultural products, because those are now merged in the General Tariff. I am afraid, however, I must budget for a full year's yield of the Special Duties on imports from the Irish Free State, because there is nothing to give me encouragement to look for a speedy termination of the unfortunate dispute which is responsible for their origin. I estimate the yield at £3,500,000. From the General Tariff, which this year will include a full year's revenue from the Ottawa duties, instead of only a few months as we had last year, I anticipate I will receive £24,500,000, and that,
together with other items which hon. Members will find in the White Paper, brings up the total revenue from Customs and Excise to £281,000,000. That is less than last year's receipts by a little over £7,000,000.

INLAND REVENUE.

I come to Inland Revenue. I put Inland Revenue on the existing basis of taxation at a total of £390,000,000, made up as follows; Income Tax, £240,000,000; Surtax, £51,000,000; Death Duties, £75,000,000; Stamps, £21,000,000; and Land Tax and arrears of Excess Profits Duty and Corporation Profits Tax, £3,000,000. In putting the Income Tax at £240,000,000, I am estimating that I shall receive less than I did last year by no less than £11,500,000. Unfortunately, the returns with which traders are good enough to furnish me show that the profits of 1932 on which the assessments will be made, were considerably less than they were the year before, and, in addition to that, we have also to take into account the effect of the loss of tax brought about by the Conversion, which, of course, means a smaller amount of interest.

I call the figure of £51,000,000, which I have estimated for Surtax, depressingly low. Hon. Members, no doubt, are aware that the collection of Surtax lags a year behind that of Income Tax. It is levied for this year upon the statutory income of 1932, which, generally speaking, represents the interest and dividends of 1932, and the profits and salaries of 1931. I must, therefore, anticipate a further shrinkage below the receipts of last year, which were then about £5,000,000 lower than I estimated, and £16,000,000 below the amount received in the previous year. By putting Death Duties at £75,000,000, I have taken account of the fact that we have a higher level of values for securities, but against that I have to set the fact that last year's yield contained an element of windfall. Stamps at £21,000,000 mean that I have put the increase over last year at the same amount as the increase of last year over the year before.

The remaining items give me a revenue of £41,730.000. Motor Vehicle Duties I estimate to be unchanged at £5,000,000, and Crown Lands revenue, a trifle
changed, at £1,230,000. Sundry Loans and Miscellaneous Revenue are slightly better at £3,800,000 and £20,000,000 respectively, and the Post Office receipts are unchanged at £11,700,000. That figure for the Post Office exceeds the actual receipts for 1932 by £800,000, but that is accounted for because we expect extra revenue from telephones and wireless. I take this opportunity of making an allusion to the report of the Bridge-man Committee. It has already been announced that the Government have accepted in principle the recommendations of that committee, and the Finance Bill will give effect to that decision in such a way that the first payment will be made to the Post Office Fund in 1934. The Bridgeman formula has been simplified, but we expect that the financial effect will, in the long run, be unaltered, so that I shall have to budget for receipts in 1934 of £10,750,000, provided, of course, other things remain the same. Adding together the items I have mentioned, we get a total estimated revenue on the existing basis for 1933–34 of £712,730,000.

EXCHANGE EQUALISATION ACCOUNT.

I turn for a moment to another matter. One of the principal features of the last Budget was the establishment of the Exchange Equalisation Account, a new departure which was very generally approved, although I think a certain amount of alarm was expressed lest very heavy losses should be incurred on the working of the account. I am happy to say that those fears have proved to be unjustified. I think I am entitled to claim to-day that the Exchange Equalisation Account has stood the test of experience, and that during the last year, in spite of some rather severe financial storms, and a great deal of surging to and fro of the waves of capital, the exchange rate has remained comparatively steady. I believe that traders in this country and Governments in other countries whose currencies are either linked with sterling, or closely follow it, appreciate that the Exchange Equalisation Account has played an important part in maintaining that stability.

One sometimes hears the view expressed that it would be better to leave sterling to follow what is called its natural course, but the value of a currency which was not anchored to the Gold Standard and was left to follow a natural course, would dis-
play very wide fluctuations. That is partly due to seasonal causes. The pound sterling is habitually strong in the Spring and weak in the Autumn. One could leave that circumstance to produce a perfectly unnecessary exchange fluctuation but it is a more reasonable course to collect resources adequate in amount during the Spring in order to pursue a policy of mitigating fluctuations when the real pressure comes in the Autumn. The fluctuations are also brought about by capital movements. It is only in periods when the inflow and the outflow of short-term capital happens to balance out that the exchange, if left free, would be even approximately stable. If you take trade transactions in this country alone, they might give rise to exchange transactions of perhaps £1,000,000 in a day, or even occasionally as much as £2,000,000. But the total exchange dealings are much greater, and we had actual experience last year of foreign capital going out of this country or coming into it up to a level as high as £8,000,000 or even more in a day. If the exchange were left to follow what is described as its natural course on such occasions as that, I am quite sure that there would be an irresistible cry from traders that it was impossible for them to conduct any business at all under such conditions.

Speaking then with greater experience of the working of this Fund than I had last year, I say without hesitation that it has proved its value. It has smoothed out the day to day and hour to hour fluctuations to the benefit of everybody concerned. It has never aspired to do anything more, and it is quite certain that even if we attempted to alter the long-term trend of the exchange, we should not succeed. That—with the clear evidence of the balance of trade still against us in this country—is my answer to the critics who are disposed to suggest that the Account has been used to secure an under-valuation of sterling.

During the last few months, we have found ourselves in the presence of a new phenomenon distinct either from seasonal fluctuations or from speculative operations, and yet in no way arising from or related to the permanent value of sterling. It has taken the form of a removal of funds from many other countries into this country because it was considered to be the safest place of deposit.
Money which comes here in those conditions is obviously bad money, because at any time it may, and at some time, probably the most inconvenient moment, it will, take flight back again whence it came. During these last few months money of this character has been coming here in quite unexpected quantities. Although on the whole we have succeeded in preventing any violent fluctuations in the exchange, the resources of the Fund have at times been severely strained.

I have given a good deal of consideration to the position which has thus been created. Every country has its own problems to face and has to solve them in its own way. In our case, since 1925. we have worked with an extraordinarily small gold reserve, notwithstanding the large deposits here of short-term foreign money. In comparison with other great financial countries, we have made but a small demand on the world's stock if gold; but our self-abnegation exposed us to serious anxieties and consequences which were not foreseen. From the moment when we returned to the Gold Standard the accumulation of short-term foreign capital here in excess of our own short-term claims upon foreign countries constantly placed us in a vulnerable position. Over and over again it necessitated the adoption of high money rates and other precautions inconvenient to our internal economy and eventually, at a time of special financial weakness, drove us off gold. We cannot risk the same kind of difficulties again for want of taking reasonable precautions. Accordingly I decided some time ago that it would he necessary to make an addition to the resources of the Exchange Equalisation Fund, and at a later stage I shall propose to ask the Committee to pass a Resolution for that purpose.

Before I leave this subject, I must say one word about the action recently taken 135, the United States Government in restoring the embargo on the export of gold. From what I have just said the Committee will realise that there is no connection whatever between the American action and the increase in the Exchange Equalisation Fund, which was decided upon long before we had any conception that the American Government might go off the Gold Standard. But I would like to say further that we recognised from the first that the President's
action was in no sense directed to any relations or conversations with other countries, but was prompted by purely internal considerations. We are happy to think that our desire for international cooperation is shared in the United States, and while we cannot disguise from ourselves that the situation as it has developed in recent days has involved some anxieties and requires the closest and most careful consideration, we shall await with the friendliest interest the future measures which the President has no doubt in mind, and which we earnestly hope will promote the establishment of a renewed confidence.

MINOR CHANGES.

Now I am going to ask the Committee to give their attention to certain changes in taxation which, I may say, however, are not of sufficient importance financially to make any marked effect upon our national accounts. The first is designed to assist in the expansion of industry. There is in existence what is known as the Companies Capital Duty—a duty upon the raising of new capital at the rate of £1 per cent. That seems to be a very high charge in times like these, and I propose to reduce it to 10s. Ordinarily a relief from Stamp Duty takes effect only from the passing of the Finance Bill, but in this case I am proposing that the relief shall take effect from to-morrow, and the Finance Bill will provide accordingly. The cost in a normal year would be about £1,500,000, but in view of the present low level of the Stamp Duties I think that it is sufficient to estimate for a loss of £600,000 in the present year.

OTHER INLAND REVENUE CHANGES.

I have already called attention to the great savings which have been made in consequence of the Conversion operations, and of their reaction upon the yield of Income Tax. Now I think that also involves a, reconsideration of the interest rates on the Death Duties, and on the arrears of Excess Profits Duty. The rate on the Death Duties was raised in 1919 from 3 to 4 per cent. without deduction of tax, and the rate on arrears of Excess Profits Duty is at the present time 4½, per cent. Obviously those rates are too high to-day, and accordingly I propose from to-morrow to reduce both of them to 3 per cent. without deduction of tax. I have put the cost of the reduc-
tion for Death Duties at £250,000 in this year. The cost of the other reduction is only trifling and has been allowed for in my estimate of arrears to be collected. The next item I want to mention concerns the flat rate allowances for repairs under Schedule A. The present rate, introduced in 1923, was to last for five years. In 1928 it was extended for another five years to 1933, and I now propose to prolong it for a further three years to bring us up to 5th April, 1936.

CO-OPERATIVE SOCIETIES.

I come to the vexed question of the liability of co-operative societies to Income Tax. In my speech last year I stated that the Government's desire was to see an end put to a very long-drawn-out controversy, and we hoped that the appointment of a Committee to investigate the whole affair might lead to something in the nature of a final settlement. Well, the Committee have reported. They rejected the view that was put forward in some quarters that the dividend, or "divi," should be taxable, and recommended that it should be treated as a trade expense similar to the discount given by ordinary traders, but they expressed their agreement with the majority of the Royal Commission which reported in 1920 that the gains arising from trading with members—the so-called mutual trading—should be made chargeable to Income Tax. The effect of their report was, broadly, that the undistributed income of the societies should be taxed at the full rate, while the distributed income should continue to be taxed in the hands of the recipients. It. was estimated that, as a result of those recommendations, if they were put into operation, there would be an increased revenue of £1,200,000 in a full year. After the report had been presented, I saw the representatives of the co-operative societies—[HON. MEMBERS: "And the traders."]—and I saw representatives of traders, too. The deputation which came to see me, I found, were, very strongly opposed to that recommendation of the Committee, which dealt with what is known as the principle of mutuality. They told me that they regarded this principle as one which ought to be considered sacrosanct, and they said that if the recommendations of the committee on that point were carried
into effect, it would be regarded by their members as a penal measure directed against their movement.

After consideration of these observations, as the Government were still anxious to obtain a final settlement of this matter, I met the representatives of the co-operative movement again in order that I might see whether it was practicable to arrive at some solution which would, as far as possible, meet their views on the subject of mutual trading, and at the same time substantially remove the grievances of traders who object to the special position which the co-operative societies enjoy under the Income Tax Acts. At the meeting which I held we did not find it possible there and then to arrive at any such solution, but the discussions are still proceeding and I am still hoping that it may be possible for us to reach an agreement before the introduction of the Finance Bill. At the same time, I want to make it clear that in the opinion of the Government the matter cannot be allowed to rest where it is. Some provision will have to he inserted in the Finance Bill and, in due course, I shall ask the Committee to pass a Resolution which will enable us to put into the Finance Bill such provisions as may ultimately be found expedient. In the meantime, in order not to prejudice the possibility of our arriving at a satisfactory settlement, I am not proposing to table a Resolution to-day.

Sir BASIL PETO: Can the right hon. Gentleman tell us if there is any precedent for discussing with the taxpayer whether he ought or ought not to be taxed?

Viscountess AST 0 R: The brewers.

Mr. CHAMBERLAIN: I do not think we need any precedent for action of this kind. I cannot help thinking that the whole House would be glad if we could come to a settlement on a matter which in the past has created bitter feeling on both sides and which is really a dispute over a matter which ought to be finally settled, once and for all. For my purpose, of course, it is necessary that I should insert some figure in my Estimates, and accordingly I have set down the sum of revenue of £750,000 for this year, but I would ask the Committee to regard that sum as purely provisional, pending the final proposals of the Government.

MATCHES AND MECHANICAL LIGHTERS.

Coming to Customs and Excise, I have two small changes to propose dealing with matches and mechanical lighters. The present main Customs Duty on matches is 4s. 4d. per gross of boxes containing from 20 to 50 matches. There is also an Excise Duty of 4s. 2d. per gross. The difference between the Customs and Excise does not contain any Protective element. Since the introduction of the Import Duties Act, however, some of the raw materials of the match makers have become subject to duty and the manufacturers have no access to the Advisory Committee under the Import Duties Act, because the Match Duty is a Revenue Duty. That is an anomaly, and I propose now to put it right and at the same time to give a small measure of protection to the match manufacturers by raising the main Customs duty to 4s. 9d. per gross, and the other Customs rates will be put up accordingly. I estimate that the revenue from this change will be £100,000 in a full year and £90,000 this year. That will be accompanied by an increase in the duty on mechanical lighters. Accordingly, I propose to raise the present duty of 6d. to 1s. for the home-produced article and to 1s. 6d. for the imported article. That, again, will involve a similar increase in duty on imported component parts and the withdrawal of the concession allowing imported component parts to be transferred duty-free to manufacturing premises for assembly.

SILK AND ARTIFICIAL SILK DUTIES.

I now come to silk and artificial silk. The Committee may remember that last year I undertook to refer to the Import Duties Advisory Committee the whole question of the duties on silk, with the request that they would give me their recommendations, with a, view to imposing some element of protection. The present duties are principally revenue duties, although there is perhaps some protection in them. The subject is a complicated one, and highly technical. There are a number of different sections in the trade, with diverse and sometimes rival interests, and the task of the Advisory Committee has been rendered even more difficult and more laborious because I had to ask them continually to bear in mind the revenue considerations which were important from my own point of view.
The Committee have received a variety of representations from the industry. They have had many hearings but owing to the great complexity of the problem I regret to say that it is not possible for me to deal with it in the present Budget. As the Committee knows, when I do receive recommendations on these duties from the Import Duties Advisory Committee I cannot, as the law stands, make them operative by Treasury Order. As things are now they would have to wait until the introduction of another Budget. I think that is undesirable. Apart from the long delay which would be involved there are general grounds, I think, for transferring this matter to the purview of the Import Duties Advisory Committee. Therefore, I propose to alter the situation and to apply the machinery of the Import Duties Act to the silk and artificial silk industry. That will give them access to the Committee and it will enable the Treasury, by Order, to give effect to any recommendation that that Committee may make. Accordingly, I shall table a Resolution to that effect. Further Resolutions will be required to authorise minor amendments of the law shown by experience of the Import Duties Act to be advisable.

HOPS AND SPARKLING WINES.

I come to hops. At the present time there is a duty of £4 per cwt. on imported hops. That duty was first imposed in 1925 for a period of four years on the expiry of the Hop Control, which had been initiated during the War. In 1929 it was again renewed for four years and now, after consultation with my right hon. Friend the Minister of Agriculture, I propose to renew this duty, which would otherwise expire in August next, for a further four years, but in view of representations which have been made to me by users that difficulties may arise out of the co-existence of a duty with some form of quantitative regulation under the Agricultural Marketing Bill, I am prepared to say now that if any such regulation should be introduced, I should be ready to consider whether any modification of the duty were required.

Another interesting but minor item is the imposition of an additional Excise Duty upon British sparkling wines. Imported sparkling wines have always paid a surtax over the duty upon still wines,
but British sparkling wines, perhaps because they have not been taken very seriously hitherto, have escaped with the ordinary duty of is. 6d. a gallon paid by all British wines. Now, for the protection of the revenue, it is desirable that they should pay a fair share of taxation, and I am proposing therefore to put a surtax of 6s. per gallon upon these wines, which will compare with the existing surtax of 6s. 3d. a gallon on imported Empire sparkling wines. The yield from that surtax I estimate as only £7,000 this year.

HEAVY OILS.

The next item concerns a new Customs charge on heavy hydro-carbon oils. At present there is a duty on light oils, mostly petrol, of 8d. a gallon. The Committee may remember that since its inception in 1928 this duty has been imposed in form upon all oils. but in the case of heavy hydro-carbon oils there has been a rebate of the full duty, so that these oils have been exempt. That device has produced a rather curious legal effect, because as they are nominally subject to the duty they are therefore free from the imposition of a duty under the Import, Duties Act. That is an anomaly which I propose to rectify. I propose to reduce the rebate from 8d., the full amount of the duty, to 7d., which will, in effect, subject these heavy oils to a duty of Id. a gallon. In order to secure for the revenue a duty on the very large stocks of oil now held in the country I propose to supplement the Customs duty by an Excise duty of 1d. per gallon upon all stocks of heavy petroleum oils exceeding 10,000 gallons. The oils that are mainly affected are fuel oil, gas oil, Diesel oil, lubricating oil and kerosene. All these oils are now totally exempt from duty. I have received very strong representations from the coal industry, supported by the gas and electricity supply industries, and by the railway companies that in the interests of the British coal and allied industries I should review what they regard as an anomalous position. I am not unmindful of what happened in 1928 when a duty on kerosene was suggested, but that duty was a duty of 4d. a gallon, and I am only proposing a duty of ld. a gallon. Moreover, I submit to the Committee that the introduction of the Import Duties Act, which has changed our whole fiscal system, has at the same time changed the
situation in regard to this matter. I do not see that any complaint from any user of kerosene can possibly arise from the very modest proposal that I am making. I should add that oil shipped as stores or bunkers on foreign-going ships will, following the usual practice, be free from duty and that the exemption now given to fishing boats and lifeboats for petrol will automatically extend to kerosene or any other form of heavy oil they may use. I estimate the yield in a full year at £2,300,000 and this year, including the supplementary one day Excise, I put it at £2,000,000. That proposal will take effect as from six o'clock this evening.

MOTOR VEHICLE DUTIES.

The Committee will expect me to announce the Government's decision upon the taxation of motor vehicles. Whatever views may be held about the calculations and recommendations of the Road-Rail Conference, I do not think there can be any dispute that in the interests of equity between different forms of transport there is an unanswerable case for an increase of the duties upon the heavier class of road vehicles in the goods class. Indeed, such an increase is long overdue, and that was recognised not only by the Road-Rail Conference, but also by the Royal Commission of some three years ago. It is particularly anomalous that the taxation scale should stop at five tons unladen weight when there are many road vehicles which reach 10 tons and even more. I propose, therefore, to impose substantial increases on the heavier goods vehicles as from the 1st January next, and hon. Members will see in the White Paper the details of these proposals.

When they come to examine these details they will find that in a good many respects they vary from the proposals of the Salter Report. It seems to me that in fixing these duties we cannot base them upon any exact mathematical computation of the numerous different factors, which tell in different ways, but which, in one way or another, have to be taken into account. I do not accept the suggestion that £60,000,000 is the normal annual highway expenditure for the next few years, nor do I admit that the Petrol Duty is levied solely or primarily, even on commercial vehicles, as a contribution to road costs. Neither the origin nor the subsequent progress of the tax justify
anything of that kind. I estimate the yield from these duties to be £1,750,000 in a full year, and £1,100,000 in 1933. That £1,100,000, of course, does not come direct to the Exchequer, it goes to the Road Fund, but it will accelerate the repayment of advances which have been made by the. Exchequer to the Road Fund in the last few years, and I have taken account of this in my estimate of Miscellaneous receipts.


DEBT REDEMPTION.


These various changes, upon which I have dealt with up to now, raised my estimated revenue to
£714,777,000


I deduct from that the estimated expenditure of
£697,486,000


And I am left with a surplus of current revenue over current expenditure of
£17,291,000


without making any allowance for the Sinking Fund. At this point I may say that I am not proposing this year to make any provision for the redemption of Debt. In ordinary times the vast volume of our indebtedness imposes upon us the necessity of redeeming it at a rapid rate, and, of course, in the crisis it was essential to maintain a reasonable Sinking Fund as one of the measures necessary to restore confidence. But confidence has now been restored, and to-day we find ourselves in a position not unlike that with which my right hon. Friend the Member for Hill-head (Sir R. Horne) had to deal in 1922. The country has carried through great Debt operations in the face of immense difficulties, and since 1931, without any marked change in the level of commodity prices, it has brought down the yearly burden of internal Debt from £276,000,000 to £224,000,000. The result of the conversion of the War Loans has been nearly to obliterate the obligatory Sinking Funds; they stand no longer at £32,000,000, but roughly at £7,500,000. I do not think that even the strictest financial purist will quarrel with me for borrowing that small sum to meet my purposes in the present year. In times like these, of unemployment and stress on all sides, and of trade depression, we can, in my opinion, use our money more wisely and more profitably than in the redemption of Debt, provided, of course, that we make generous provision for it when good
times come. Therefore, I regard this balance of £17,250,000 as free to be devoted to any purpose which may be suitable.

BEER DUTY.

Among the many suggestions which have exercised the ingenuity of hon. Members and others, I have frequently been advised not to confine my thoughts to the present year, but to look ahead. I shall have something to say about the idea of a three-year Budget, but I should indeed be a very indifferent guardian of the public purse if I did not consider what effect any financial measures of today might have upon the finances of the future. Every tax has to be kept under constant supervision, so that the Chancellor of the Exchequer may judge how far it is able to stand an increase of the rate, or how near it has come to the point at which the law of diminishing returns begins to operate. I am afraid that in my survey of the whole field of taxation I must concede that a good many taxes have reached the limit. There is one case in which it has palpably passed it. A source of revenue which has brought comfort to many of my predecessors has now been seriously undermined. On the information that has reached me from time to time I have an idea that hon. Members are not t unfamiliar with the history of the Beer Duty, but all the same I hope they will allow me to present a few figures to them which seem to me to be relevant to my present predicament.

In 1923 the duty, which then stood at 100 shillings per standard barrel, was reduced by a rebate of 20s. per bulk barrel. For some years after that it afforded a yield of over £80,000,000, but by 1929 the yield had fallen to £77,000,000. In 1930 the duty was raised by another three shilling per standard barrel, but the yield fell to something less than £76,000,000. In September, 1931, there was a great rise in the duty of 31s. in the standard barrel, and once again, instead of increasing, the yield fell; and in 1932 it dropped to less than £74,000,000. Between the years 1929 and 1932 the consumption fell from 20.7 to 13.8 million standard barrels, a drop of 33 per cent. Nobody in my position could view that situation without concern. It cannot be said that I have been over-hasty in coming to a decision. Last year I resisted the appeals that were
made to me to reduce the duty in the hope that it might still give me the revenue which I then so much required, but its failure to reach my anticipations has convinced me that I cannot afford to wait any longer before taking some measure to safeguard the revenue of the future.

I have considered a number of various schemes from the point of view of their probable effect on consumption and also in the light of their probable cost; and I have come to the conclusion that, if my purpose is to be achieved, two things are necessary, first, there must be some reduction in the retail price of beer, and secondly, there must be some improvement in the quality, which, incidentally, would give assistance to agriculture. I could attain the first of these ends by a simple reversion to where we were before the duty was increased in September, 1931, but I am afraid if I merely did that I could not expect any general increase in the gravity of beer. I have made up my mind to sweep away the whole existing plan and substitute for it an entirely new scheme of duties. As from to-morrow beer will be charged at the rate of 24s. per bulk barrel, up to and including a gravity of 1,027 degrees—

Mr. THORNE: That is water.

Mr. CHAMBERLAIN: There is no greater authority in the House than the hon. Member, but perhaps he will allow me to finish my sentence—with a rise of 2s. per degree over that gravity. The effect of this change, which will be more apparent to those who are more familiar with the trade than the hon. Member and the majority of hon. Members, will be that the retail price of beer will be reduced by one penny per pint and that the quality will be improved. To make sure that the benefit of this proposal shall reach the public, and that the British farmer shall get the maximum benefit from it I have been in communication with the Brewers' Society, upon whom I have urged strongly that they should endeavour to secure that in future a larger proportion. of the barley they require is drawn from British sources. I have received from them a letter which I propose to read to the Committee. It is signed by Mr. F. A. Simonds, Chairman of the Brewers' Society, and is as follows:
In pursuance of the interview which you were good enough to grant to me and other representatives of the society on the 11th instant, when you discussed with us the possibility of making such a re-arrangement of the Beer Duty as would ensure the production of cheaper and better beer, and at the same time secure the use of a greater proportion of home-grown barley, I give you, on behalf of the Brewers' Society, the following undertaking:
That in the event of the Beer Duty in future being based on a scale commencing at 24s. for all beers brewed up to and including 1,027 degrees, with a rise of 2s. per degree above that figure, the Brewers' Society will strongly recommend all brewers to make such arrangements with retailers as will ensure the retail price of beer being reduced by a penny per pint on the day following the Budget statement in Parliament; and the society will also use its influence to induce all brewers to raise the gravity of their beers by at least two degrees.
In order to give the maximum assistance to British agriculture the society will recommend all brewers to increase as far as possible the proportion of home-grown barley in the brewing of all classes of beer.
In making these recommendations to the brewers the society will make it clear that the concessions in the duty above indicated were granted as the result of the assurance being given to you by the representatives of the society, that the society will take all steps in its power to secure that these recommendations will be honourably carried out.
Now what is going to be the cost? It is very difficult to predict with any confidence what the cost of these changes in the Beer Duty will be, because it involves two calculations: First of all, what the duty will be if the concession is made; and, secondly, what it would have been if the duty had been left where it was. I am advised that I cannot expect any great increase in consumption to follow immediately on this change, although it is very possible that the decline may be arrested. I put the loss at £14,000,000, and that reduces my free balance to £3,291,000.

DIRECT TAXATION.

There has been a considerable amount of agitation—I might almost call it a drive—in favour of deliberately unbalancing the Budget in order to take a substantial slice off the Income Tax. That proposal has been supported by eminent economists, powerful journalists, and, if my information is correct, by some hon. Members of this House. But not to keep the Committee in suspense, I say at once that I am not prepared to take that course. At the same time, a
proposal to reduce taxation is so attractive, especially when people are told by persons speaking as having authority that, so far from this being the broad road that leadeth to destruction, it is actually the straight and narrow path that leadeth to salvation, I think I ought to give the Committee some of the reasons which have led me to a decision that the proposal cannot be entertained. I can assure the Committee that I am not dismissing this idea merely because it is unorthodox. On the other hand, I am not impressed by the suggestion that its acceptance would be a proof of courage on my part. Courage does not always lie in taking the easiest and most popular course. In any case I am not concerned with the effect of any action that I may take upon my own reputation. As long as I hold my present office my duty is to do what seems to me best in the interests of the country, and it is from that point of view alone that I considered this question.

Let us see then what are the arguments for and against this proposal to reduce direct taxation by unbalancing the Budget. There are many variants of the suggestion, but I think there is a general argument which underlies them all, which I might put something like this: That the time has now come when trade recovery is on the point of materialising, and that a reduction of direct taxation would give such a psychological fillip to the country that the wheels of industry would start running again at such a rate that in a comparatively short time, say in three years, we might expect to find ourselves in possession of a substantial surplus of revenue. That programme is to be combined with a programme of public expenditure, and the combined programme is to be announced beforehand so that the public may be directed to pay attention only to what is to happen at the end of the period, and to disregard the question of whether at any intermediate stage there is a surplus or a deficit.

My first comment on that idea is that it seems a highly optimistic one. Suppose that I were to take a shilling off the Income Tax this year. That would cost £50,000,000. Then, according to the plan, I am to expect in 1934 that I shall draw somewhere about level, and that in 1935 I shall have a surplus of not less than £50,000,000, so that over the whole three
years the Budget is to balance. That means that an extra £50,000,000 has to materialise in 1934, and an extra £100,000,000 in 1935. If those results are to be produced out of Income Tax alone, as some people suppose, it would mean that the profits of 1933, this present year, would have to be increased by £250,000,000, and the profits of next year would have to be increased by £500,000,000. Of course, these vast figures are purely academic. We all know that any general increase of prosperity would affect the Budget in many ways. I dare say most of them would be favourable. But I put it to the Committee that, at least, these figures show the necessity of caution in accepting too readily the anticipations which are so hopefully attached to the idea of a three years' Budget.

As a matter of fact, however, everyone knows that you cannot possibly, in these times, forecast what is to happen over three years. Even one year may produce quite unexpected results, as the Committee has seen in the review I have given of the year that is past. If I were to pretend that I could lay out a programme under which what I borrowed this year would be met by a surplus at the end of three years, everyone would very soon perceive that I was only resorting to the rather transparent device of making an unbalanced Budget look respectable.

I am not disposed to deny that the reduction of direct taxation might produce a real psychological effect in stimulating business and encouraging the spirits of the country, provided it was covered by a surplus of revenue over expenditure. But I very much doubt whether it would produce that effect if there were no such surplus, and if the public realised, as they certainly would do, that what was spent to-day had presently to be paid for. I must, moreover, ask this question: What would happen supposing that the reaction to the reduction of direct taxation did not actually materialise, as is so confidently expected? Do not let us forget that we are not immune, that we cannot be immune, from those grim forces that hold the world in their grip. With world trade shrinking, with world prices falling, can we really persuade ourselves that by unbalancing our Budget we are going to reverse these world movements, and that
so rapidly that confidence would not wilt and falter while we were waiting for the upward turn? Suppose that we did unbalance our Budget for the purpose of reducing Income Tax, can we assure ourselves that, however earnestly we told the country that we were only doing it really to help the unemployed, we should be able to resist the demand which would assuredly arise for an extension of the process? If that were so, should we not very rapidly get back to the very position that this Government was returned to relieve, when uncertainty and apprehension about the future, and anxiety, would quickly smother all the hopes and expectations that have been aroused by our original action?

No Finance Minister, as far as I know, has ever deliberately unbalanced his Budget when he possessed the means of balancing it. Certainly my right hon. Friend the Member for Hillhead did nothing of the kind in 1922, when in his Budget Speech he proposed to suspend the Sinking Fund. On the contrary, he said then that the taxpayer must find the revenue to meet the expenditure. He did right. No Finance Minister would willingly abandon the primary bulwark against extravagance or forget that an unbalanced Budget may presently have to be balanced again. But although no Finance Minister voluntarily unbalances his Budget, sometimes external circumstances perform that task for him.

Look round the world to-day and you see that badly unbalanced budgets are the rule rather than the exception. Everywhere there appear budget deficits piling up, yet they do not produce those favourable results which it is claimed would happen to us. On the contrary, I find that budget deficits repeated year after year may be accompanied by deepening depression and by a constantly falling price level. Before we embark upon so dangerous a course as that, let us reflect upon this indisputable fact. Of all countries passing through these difficult times the one that has stood the test with the greatest measure of success is the United Kingdom. Without underrating the hardships of our situation—the long tragedy of the unemployed, the grievous burden of taxation, the arduous and painful struggle of those engaged in trade and industry—at any rate we are-free from that fear, which besets so many
less fortunately placed, the fear that things are going to get worse. We owe our freedom from that fear largely to the fact that we have balanced our Budget. By following a sound financial policy we have been enabled to secure low interest rates for industry and it would be the height of folly to throw away that advantage. If we were to reverse our policy, just at the very moment when other Governments are striving to follow our example and to balance their Budgets, after experience of the policy which we are now asked to adopt, we would stultify ourselves in the eyes of the world and forfeit in a moment the respect with which we are regarded to-day.

In my opinion, the pessimism about our financial prospects which lies at the back of all these proposals has no justification in fact. The decline in the yield in taxes reflects the decline in the national income, and that again is intimately associated with the fall in world prices and the fall in world prices affects the capacity of our customers to buy from us. There is also the fall in sterling prices and although it is impossible to say whether this long-drawn out fall in world prices has yet come to an end, at any rate sterling prices, which are so much more important to us, have remained substantially steady over the last 18 months. We may say that trading profits fell last year, but it is not true to say that the decline is progressive. On the contrary, the fall last year was only half what it was in each of the preceding years. The difficulties from which we are suffering to-day are due, as I have said, to the aftermath of the events of 1931. The remarkable fact is that last year's collection of Income Tax on the current year's charge, actually slightly exceeded the Inland Revenue estimate. The failure of the total yield to reach the figure which I had anticipated was due, as I have said, to a reduction in the collection of arrears and to some increase in repayments. I do not accept the position, then, that, financially, we are in peril if we continue to be guided by sound and well-tried principles of policy. Against the fall in revenue and the continued burden of unemployment we must set the great reduction in the interest charge and, with a real improvement in trade and employment, will come the possibility of a reduction in the rates of taxation.

INCOME TAX (HALF-YEARLY PAYMENT).

For the reasons that I have given to the Committee, among others it is not possible for me to reduce the rate of Income Tax. But I ask the Committee to believe that I have not been insensible to the plea which has been put forward that something should be done to revive the flagging spirits of the nation and that the extraordinary efforts made by the taxpayer last year deserve some recognition. I do recognise that when the taxpayer at the beginning of 1932 was faced, not only with a rise in the rate of his tax, but also with the requirement that in January he should pay three-quarters instead of half, and that in the four quarters of the year he would be called upon to find five quarters tax under Schedules B, D and E, he was given a task so heavy that nothing but a strong sense of duty to the country could have enabled him to carry it through. I particularly sympathise with those living on comparatively small incomes to whom this payment of three quarters in one lump in January comes at a particularly difficult time.

Looking over these things, I reflected that if only it had been possible for me to reverse the procedure of 1931–32 and to revert to the old half-yearly system, so that the taxpayer under these three Schedules would only have to pay half the tax, instead of three-quarters in January next, we should have afforded him a much-wanted relief and would, moreover, have released a substantial sum, which, by its circulation, might have done something to stimulate and encourage trade and industry. I went so far as to make some investigation as to the cost of a plan of that kind. I found to my dismay that it would involve a loss of revenue of £12,000,000. It was true that it would not be a genuine loss but would only be a postponement of revenue, but, then, as I have told the Committee, I had at my disposal only this meagre sum of £3,250,000. In those circumstances, I recalled the old Biblical story of how Abraham in need of a sacrifice to save the life of his son Isaac looked round and, behold, there was a ram caught by the horns in a thicket. I looked round and I found the ovine sacrifice that I required.

There was attached to the 5 Per Cent. War Loan a Depreciation Fund which under the prospectus of the 3½ Per
Cent. Conversion Loan is no longer required. The amount of it is £10,000,000. I propose to transfer that non-recurring asset to meet a non-recurring loss of revenue and thus, without transgressing any of the canons of sound finance, I am able to restore the half-yearly system of payment under the three Schedules I have mentioned. The taxpayer having paid one quarter's tax this July, will only pay one-half in January, thus receiving in this year a relief equal to one-quarter of the tax. This benefit will inure to 2,750,000 taxpayers and will come at a time of year when I think it will be most welcome.


BALANCE SHEET.


I am now able to strike my final balance. The Estimated Revenue taking into account the changes I have mentioned and adding the Depreciation Fund is
£698,777,000


And the Estimated Expenditure is
£697,486,000


Leaving me with a surplus of
£1,291,000


I have now only to thank the Committee for the patience with which they have listened to me. If I have not produced a startling or a spectacular Budget, it is at least an honest one, in which no attempt has been made to present things other than as they really are. Within the limits imposed upon me by times as difficult as any Chancellor of our day has had to meet, I have sought to have regard to the future as well as to the present, and my proposals will bring some measure of relief which, I believe, will be felt beyond the circle of those immediately affected.

As to the future, I will not be rash enough to prophesy. In what can be done at home we have at least made a good beginning. We have re-established confidence; we have provided cheap and plentiful money and low interest rates for long-term borrowing; we have given our industries fair play in the home market, and we have begun a reorganisation of agriculture which has already inspired our farmers with new hope. As far as possible we have striven to make sterling a useful instrument of international currency under conditions convenient for our trade. We have already
expressed our intention of proceeding with measures of internal development wherever we can find useful opportunities of extension. But I have not concealed my own feeling that the most hopeful prospect for any considerable advance towards prosperity lies in collaboration with other nations. The very success which this Government has achieved, has assigned to us a part second in importance to none in collaboration of that kind. It is in order to prepare the way for a common understanding by direct contact with the head of the State, that the Prime Minister has accepted President Roosevelt's invitation to visit him in Washington. That his mission, undertaken with a full sense of his responsibility for the welfare of this country, may prove fruitful in establishing a clearer perception among the nations of the possibilities of common action for the benefit of the world, will be, I know, the earnest prayer of every Member of this House, to whatever party he belongs.

CUSTOMS AND EXCISE.

BEER (EXCISE DUTY AND DRAWBACK).

Motion made, and Question proposed,
That, on and after the twenty-sixth day of April, nineteen hundred and thirty-three—
(a) except in the case of beer of any of the descriptions specified in Sub-section (1) of section two of the Finance Act, 1930, there shall be charged in respect of beer brewed in the United Kingdom, in lieu of the duty of excise now chargeable thereon, the following duty of excise:



£
s.
d.


For every 36 gallons of worts of a specific gravity of 1,027 degrees or less
1
4
0


For every 36 gallons of worts of a specific gravity exceeding 1,027 degrees—





For the first 1,027 degrees
1
4
0


For every additional degree in excess of 1,027 degrees
0
2
0


and so in proportion for any less number of gallons;
(b) no rebate shall be allowed from the duty of excise chargeable under this Resolution;
(c) there shall, on the exportation from the United Kingdom as merchandise, or for use as ships' stores, of beer other than beer of the descriptions specified in the said Sub-section, be allowed (in addition to any excise drawback allowable so long as a Customs duty is chargeable on hops but in lieu of any other excise drawback) an excise drawback at the following rates:



£
s.
d.


For every 36 gallons of beer of an original gravity of 1,027 degrees or less
1
4
2


For every 36 gallons of beer of an original gravity exceeding 1,027 degrees—





For the first 1,027 degrees
1
4
2


For every additional degree in excess of 1,027 degrees
0
2
0


and so in proportion for any less number of gallons:

Provided that—

(i) as respects beer of an original gravity of less than 1,027 degrees, the amount of drawback allowable shall not exceed by more than two pence for every thirty-six gallons the amount of duty which is shown to the satisfaction of the Commissioners of Customs and Excise to have been paid; and
(ii) the amendments as to drawback effected by this Resolution shall not have effect in relation to any beer as respects which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty was paid at the rates in force before the twenty-sixth day of April, nineteen hundred and thirty-three.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."—[Mr. Chamberlain.]

5.32 p.m.

Mr. LANSBURY: I understand that it is usual for a general discussion to take place on the Motion that you have just put from the Chair, Sir Dennis. Before saying anything general, however, I should like, if the right hon. Gentleman the Chancellor of the Exchequer will allow me, to offer him my congratulations upon both the matter and the manner of his Budget speech. I have heard a goad many Budget speeches, and last year I thought that he put the sets of figures before the Committee in very clear and understandable fashion, but I think that to-day he has done even better. I think that to-day he has told us much more clearly and, if I may use the word without any offence, much more honestly, the actual position of the finances of the country. He almost led me to give him a great cheer at the beginning of his speech, because he laid bare, as many of us have tried to lay bare in the country, the futility of any of the methods adopted by his Government for restoring trade and industry. I have never heard a confession quite so candid and adequate as the one the right hon. Gentleman made, and I must say that I appreciated it very much indeed.
I want to ask the right hon. Gentleman one question which perhaps he will answer. In the Resolutions that the Government are asking us to carry tonight and to debate more fully on Report, there are none, I take it, except those that deal with taxes that the right hon. Gentleman desires to come into operation immediately. There are no new ones, as far as I followed the right hon. Gentleman, containing any sort of provision similar to that which was contained in the Import Duties Resolutions last year. I wonder if he is able to tell me if there is any Resolution that he is asking us to pass to-night which has reference to a tax that will not come into operation immediately. Take, for instance, the heavy motors tax. He will not ask us to vote on that to-night, I take it, because I understand it is not to come into operation until January.

Mr. CHAMBERLAIN: We wish to get the Committee stage of that Resolution to night.

Mr. LANSBURY: But last year there was something that slipped through, and we had to raise it at midnight, on the Report stage, and we were not permitted to debate it at all. I understand that the right hon. Gentleman desires to get certain Resolutions to-night so that the taxes may immediately come into operation. We have no objection to that at all, but we think that he ought not to ask for a formal vote to-night of a new tax which is not to come into operation until January.

Mr. CHAMBERLAIN: I think the right hon. Gentleman may be quite easy in his mind, that there is nothing in these proposals which is comparable with the procedure to which he objected last year. We have not, I think, in any way departed from what is the common and ordinary practice in the Resolutions for which we are asking to-night.

Mr. LANSBURY: I accept the right hon. Gentleman's assurance, of course, and do not desire to consider that matter any further. There are some observations that I should like to make in a general sense. My hon. Friends will deal faithfully and in detail with the right hon. Gentleman's Budget during the next few days, but the first thing that I would like to say is that, so far as I
have been able to follow the right hon. Gentleman, the people who will benefit from his Budget, if there is any benefit at all, are those who drink beer and those who pay Income Tax. The unemployed, to whom the right hon. Gentleman owes the fact that he has balanced his Budget or that he has brought it as near balancing as he could, are to receive no benefit whatsoever. We, on this side, think quite definitely that any money that the right hon. Gentleman had to give away should have been given to the relief of the unemployed. It has been said again and again by the right hon. Gentleman himself, and by many other experts in this House, that if only the Budget were balanced, if only money could be cheap, trade and employment would improve, yet the right hon. Gentleman himself to-day, near the close of his speech, spoke of the stress on all sides, the bad trade, and the terrible unemployment that we are facing to-day.
We think that nothing that he has proposed in his Budget to-day and nothing that was done in last year's Budget has in any way improved trade and industry, and we think that that is due altogether to the fact that neither the Government nor any of their supporters really face the social and economic problems of our times. When I listen to the right hon. Gentleman and other speakers on finance questions in this House, I am always reminded of Carlyle's "French Revolution" and his description of the Finance Ministers of the time immediately preceding that Revolution. Every sort and kind of device was advocated and practised in order to deal with something of which none of the statesmen realised the true cause. The fundamental cause of bad trade, of unemployment, and of poverty is that neither this Government nor this Parliament nor the Parliaments of most countries in the world have faced the fact that production outstrips consumption, and that the only problem to be solved is that of how to bring about an increased consumption of the goods that are produced. No amount of sophistry and no amount of talking will get over that fact. I have listened to the right hon. Gentleman and to many of his predecessors since 1922, and none of them has really got down to that question, and until you do get down
to it, all this business of Budget-balancing and so on is beside the point.
I was struck by the right hon. Gentleman's reference to other countries and their terrible conditions. I have been to France occasionally since the War, and I have never been able to accept the theory that the mass of the people in France are worse off, or that that country itself is worse off as a nation, than ourselves. When I am told that the balancing of Budgets is the thing that will restore trade and industry. I cannot accept that at all, and all the evidence up to the present time proves that that has nothing whatever to do with the subject. It proves conclusively that you may have heavy taxation or light taxation, but that in the end, unless you find the means of distributing the goods that are produced, you will have poverty and unemployment. The fact is that people forget the spacious days of Mr. Gladstone. I lived through those days, when you had a very small Budget, when you had strict economy, when public expenditure was extremely limited, and when there was no expenditure by the local authorities. Anyone would think that those were the great days for the workers of this country, but they were exactly the reverse. The condition of the working people in those days was one of a very low level of subsistence indeed. When I hear people talk of the prosperous days of the nineteenth century, I remember the wages paid to the average working people—18s., 19s., and sometimes 17s. a week in London factories.
Therefore, I do not accept this doctrine that the right hon. Gentleman has laid down to-day, that strict economy and the balancing of a Budget are something that will restore or give prosperity to the average man or woman. My constituents under this Budget will remain just as starved as they have been any time since I and other people have represented them. There is nothing here that will restore trade at all, and I will be quite content, whether I am here or not, to be judged next year on what I am saying now. Each successive Chancellor of the Exchequer since 1920 has stood at that Box and told us what the Foreign Secretary once said—Jam yesterday and jam to-morrow, but no jam to-day; that trade will be better to-morrow, that we shall
get round the corner to-morrow, and so on. That is altogether an illusion. We are not moving forward one bit, and there is no sign of improvement anywhere.
This Budget will leave the mass of the working people exactly as they are, and in all probability a little worse. Everyone knows that the Budget has not been balanced; the right hon. Gentleman has explained that it is not a balanced Budget at all; but, so far as it is balanced, it has been balanced out of the lifeblood of the masses of the unemployed. We shall be able to demonstrate that during these discussions. An hon. Member spoke from the Liberal benches just before we adjourned of the terrible position in one division of Newcastle. I can match those conditions with conditions in many parts of London. By their economy and cutting down the Government are lowering the standard of life of very large numbers of people. Worst of all, they are not improving trade and industry. If by their policy they were improving conditions or giving any promise of improvement, it might be arguable that the people should go on suffering for a time, but there will be no improvement while the policy of this Budget is continued, because it is based on the fallacy that by economy you can increase consumption, and that by cutting down you can get rid of abundance. That, in our judgment, is absurd.
With reference to the proposal to put a tax on the co-operative societies, I am glad that the right hon. Gentleman has consulted those who can speak for the Co-operative movement. I am sorry that the hon. Baronet the Member for Barnstaple (Sir B. Peto) is not in his place, because I should have liked to remind him that he did not rise to object to the right hon. Gentleman consulting the brewers on the Beer Duty, but he did object to his consultation with the cooperators. I do not accept the view that this is a long-standing controversy and that the traders have any grievance at all. It is a great pity that we have not been able to have the evidence which was put before the Raeburn Committee. Neither the co-operative societies nor any one else except the Committee know what evidence was given on this subject, and we do not know what the traders, through their representatives, said. We con-
sider, as we said at the time, that it was not an impartial committee because one of the members was President of the Institute of Accountants, which had already given its views against co-operative societies. One of the other members was in a similar position in regard to trading. I maintain, and I think all my colleagues and all fair-minded Members of the House of Commons will agree, that before any legislation is brought in we ought to have the evidence on which the Committee based its findings. Until that is done the House ought not to pass any legislation.
Until the right hon. Gentleman tables his Resolution we shall not be able finally to judge, but I should like to ask whether the negotiations are continuing and whether it is proposed to try and get an agreed Resolution with the co-operative societies. I understand from the right hon. Gentleman's speech that in any case he is not going to adopt the whole of the proposals of the Raeburn Committee, and that the principle of mutuality is to be left as it is. I should like to hear whether I am right about that. It has been represented in some quarters that the co-operative societies desire to have a privileged position as against other citizens. That is not true at all. We do not want any privilege. We simply want to be treated exactly as other people are treated, and if it can be shown by proper evidence and after proper discussion that there is a just case for dealing in any way with the co-operative societies, I am sure the societies will be only too glad to discuss the matter and to arrive at a settlement. We are not, however, going to allow this thing to be dealt with on the lines of the Raeburn Committee's report. Unless we can get an agreed settlement we shall do our best to fight these proposals, and if we do not succeed here we shall do our best in the country.
I have no doubt that the traders have a, grievance against the co-operative societies. They have a grievance also against the big corporations, such as Boots and the Home and Colonial Stores, which plant their establishments in their midst. They have a complaint against the co-operative movement because we want through that movement to improve the private trader out of existence. We do not, however, want any advantage
from the State in doing it. On the other hand, we do not want to be treated unjustly by the State, and we think that the proposals of the Raeburn Committee are unjust. I hope that the right hon. Gentleman will continue his discussions and that when he brings a proposal forward it will be an agreed proposal.
The giving of one penny a pint off beer may apparently be a very popular thing to do, and it may be popular in other quarters to deal with the Income Tax as the right hon. Gentleman has done. But we have reached a. very low point in our national history when we have to be saved by a penny a pint, off beer. It shows that, in spite of the right hon. Gentleman's statement that he does not take much notice of criticism, he has bowed to an agitation which he will find in the long run not very profitable. Although I am a teetotaller, I have never said anything against any one who drinks beer, spirits or wine. I am certain that the younger men and women are not drinking so much as they did in the past, but this Budget will tend to prevent a still further fall in drinking habits. I am sure that it will not succeed, and that the taking of less intoxicating drinks will continue. I do not say that people will become total abstainers altogether, but they are finding their amusement and recreation to-day in a better way than by merely sitting in public-houses or elsewhere and doing nothing but drink. The working people can walk into the country or go to cinemas, and there are one hundred and one ways in which they are spending their leisure differently from the way in which they did it in the past. When the right hon. Gentleman had some money to spare, the first people of whom he thought were not those who are at the bottom of the social scale, the victims of bad trade and of our social system, but the people who can much better look after themselves. We consider that he ought to have used whatever money he had to spare to help the unemployed by giving their children and their women better conditions they they have at the present moment.

5.56 p.m.

Sir HERBERT SAMUEL: The custom has grown up in the House of recent years that on the day of the Budget state-
ment the House should adjourn very early and that Members should not engage in any survey of the Chancellor of the Exchequer's proposals, or still less in any general consideration of the state of the nation. That has always seemed to me to be an admirable custom. I shall not therefore follow the right hon. Gentleman, the Leader of the Opposition, in his somewhat elaborate review of both the Budget proposals and the present conditions of the country. If leaders of parties are to examine the Budget proposals and policy in general, then private Members necessarily will think it encumbent on them to do so, and this custom, which has generally been regarded as an admirable custom, will gradually disappear.

Mr. LANSBURY: The right hon. Gentleman was a member of the Government last year, and if he looks it up he will find that the Prime Minister broke the rule then. I called attention to the fact and said that I intended to do it.

Sir H. SAMUEL: I hope that these reprisals will not continue indefinitely, but that an armistice will be agreed and that in future years the more peaceful methods that previously prevailed will be repeated and the old custom re-established that on Budget day the Chancellor's speech should be in effect the only speech to be made. There is, however, one thing which the Committee does desire to do, and that is to congratulate the Chancellor of the Exchequer on the accomplishment of his heavy task and the fulfilment of what must be to every Chancellor a most onerous responsibility. I have heard, I think, about 20 Budget statements in this House, but I do not think that I have heard one which excels that of to-day in lucidity and conciseness. Those are great virtues in a Minister, and they are the greatest courtesy that a Chancellor can show to his audience. Those qualities have been very evident to-day. The Budget statement has been crystal clear, and, considering the magnitude and complexity of the financial matters with which the right hon. Gentleman had necessarily to deal, it was remarkably compact. If it did not evoke any marked enthusiasm in the Committee, that was because neither the conditions of the time nor the proposals that were made were calculated to evoke any great degree of enthusiasm. I do not suppose
that the country will think that the Budget shows any remarkable degree of resourcefulness. It is rather a, pedestrian Budget, but the conditions of the time do not provoke any flights of Pegasus.
One point was omitted from the Chancellor's statement, and if any Minister is going to reply to this very brief discussion perhaps he will refer to it. A few days ago there was a Debate in the House, in which great interest was taken, on the burden of the cost of the able-bodied unemployed, and the Government gave an undertaking that within a short space of time a readjustment would be made as between local and national finance with a view to this charge being transferred from the localities to the Exchequer. The Chancellor did not mention that matter to-day, and as the whole question is really one of finance, because the reality of the relief to the local authorities can be measured only by the amount of the transfer to the Exchequer, perhaps the Financial Secretary to the Treasury, if he answers, will be able to tell us what is the amount of money which will be involved and which somehow or other must be included in the Estimates of this year. But, as I say, we do not propose to go into either the merits or the demerits of this Budget on this occasion. Other opportunities will be given for that, and to-day I will content myself with congratulating the Chancellor of the Exchequer on the clarity and the completeness of his statement.

6.2 p.m.

Mr. LAMBERT: There is just one question I wish to ask the Chancellor of the Exchequer, on a point which I do not think he mentioned in his Budget speech. It is to ask whether he proposes to repeal the Land Tax imposed in the Budget of 1931? Perhaps he will kindly give me an answer, yes or no.

6.3 p.m.

Mr. DENMAN: I think it is the well-known procedure that on this occasion there are no speeches on details of the Budget, but I do think one voice ought to be raised in complete and entire appreciation of the speech to which we have listened this afternoon. If I may say so, it was an extremely cheerful speech. One listens to Budgets in which the facts are not fully faced, and I remember in the first Budget of 1931 the sense of
depression with which that partial facing of facts affected not only myself but other listeners who had certain knowledge. I can assure the Chancellor of the Exchequer that his speech to-day will strike a chord of cheerfulness in those who feel that finance is being properly dealt with and the facts are being fully faced. I especially congratulate the Chancellor on his courage in facing up to that demand for speculative and imaginative finance which was so insistent in earlier stages this year that a good many of us became filled with alarm. He has justified our confidence in him by declining to be led away into those very sinister and doubtful paths. May I also deal with one detail which the Leader of the Opposition has referred to, and congratulate him on his method of dealing with the taxation of co-operative societies? I have regretted the methods the cooperative societies have adopted in endeavouring to defeat any attempt at taxation which should be applied to them. I am sure that it is in their own interests that this question should be settled by agreement. They are not in a privileged position, precisely, but in a different position.
Some of us who were through all the controversies in regard to co-operative societies when Excess Profits Duties were imposed know that special schemes had to be devised to meet their special case. Similarly, with regard to Income Tax, I hope it will be possible to devise some special scheme that will suit the real needs of the case. Admittedly, ordinary Income Tax law does not apply appropriately to co-operative societies. On the other hand, they are corporations created and sustained by law, artificial, receiving all the benefits of a stable State to which they make a relatively small contribution. The demand on the co-operative societies is that because they receive the benefits of a civilised State they should make a larger contribution than they do, and I feel sure that if they and the Chancellor would combine to devise means they could discover some special methods by which this could be done. May I say in conclusion that the claim from the Opposition that any surplus there was should have gone to adding to the "dole" really shows an extraordinary limitation of financial imagination on their part. As if that were really the best way of dealing with unemploy-
ment! We all know that three elements are required in any policy which is to restore prosperity in this country. The first is international agreement on economic disarmament—there is no dispute about that; the second is the skill, competence and energy of our industrial and mercantile populations, whether they be managers or workpeople; and the third is sound finance, and I most heartily congratulate the Chancellor of the Exchequer on having provided the third of these three elements.

Question put, and agreed to.

BEER (CUSTOMS DUTY AND DRAWBACK).

Resolved,
That, on and after the twenty-sixth day of April, nineteen hundred and thirty-three—
(a) except in the case of beer of any of the descriptions specified in Sub-section (1) of Section two of the Finance Act, 1930, there shall be charged in respect of beer imported into the United Kingdom (in addition to any duty of customs chargeable thereon so long as a duty of customs is chargeable on hops but in lieu of any other duty of customs) the following duty of customs—



£
s.
d.


For every 36 gallons where the worts thereof were before fermentation of a specific gravity of 1,027 degrees or less
1
4
5


For every 36 gallons where the worts thereof were before fermentation of a specific gravity exceeding 1,027 degrees—





For the first 1,027 degrees
1
4
5


For every additional degree in excess of 1,027 degrees
0
2
0


and so in proportion for any less number of gallons;
(b) no rebate shall be allowed from the duty of customs chargeable under this Resolution;
(c) there shall, on the exportation from the United Kingdom as merchandise, or for use as ships' stores, of beer other than beer of the descriptions specified in the said Sub-section, be allowed (in addition to any customs drawback allowable so long as a customs duty is chargeable on hops but in lieu of any other customs drawback) a customs drawback at the following ratas—



£
s.
d.


For every 36 gallons of an original gravity of 1,027 degrees or less
1
4
2


For every 36 gallons of an original gravity exceeding 1,027 degrees—





For the first 1,027 degrees
1
4
9


For every additional degree in excess of 1,027 degrees
0
2
0


and so in proportion for any less number of gallons:
Provided that—

(i) as respects beer of an original gravity of less than 1,027 degrees, the amount of drawback allowable shall not exceed the amount of duty which is shown to the satisfaction of the Commissioners of Customs and Excise to have been paid less three pence for every thirty-six gallons; and
(ii) the amendments as to drawback effected by this Resolution shall not have effect in relation to any beer as respects which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty was paid at the rates in force before the twenty-sixth day of April, nineteen hundred and thirty-three.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

CONTINUATION OF DUTY ON HOPS, ETC., AND AMENDMENT OF ADDITIONAL DUTY AND DRAWBACKS ON BEER.

Resolved,
That—

(a) the duties of customs charged by section seven of the Finance Act, 1925, as amended by section four of the Finance Act, 1929, on hops, hop oil, and extracts, essences or other similar preparations made from hops shall continue to be charged until the end of the fifteenth day of August, nineteen hundred and thirty-seven:
(b) in lieu of the additional duty of customs chargeable on beer under subsection (2) of the said section seven as so amended, but in addition to any other duty of customs for the time being chargeable on beer, there shall, on and after the twenty-sixth clay of April, nineteen hundred and thirty-three, be charged (without any rebate) on beer imported into the United Kingdom a duty of customs of ten pence for every bulk barrel;
(c) in lieu of the additional customs drawback payable under the said subsection, but in addition to any other customs drawback for the time being payable on beer, there shall, on the exportation from the United Kingdom as merchandise, or for use as ships stores, of beer on which it is shown to the satisfaction of the Commissioners of Customs and Excise that the additional customs duty chargeable under this Resolution has been paid, be allowed (without any deduction) a customs drawback of ten pence for every bulk barrel;
(d) in lieu of the additional excise drawback payable under sub-section (3) of the said section seven as so amended, but in addition to any other excise drawback for the time being payable on beer, there shall, on and after the twenty-sixth day of April, nineteen hundred and thirty-
77
three, be allowed (without any deduction) on the exportation of beer from the United Kingdom as merchandise, or for use as ships' stores, an excise drawback of ten pence for every bulk barrel;
(e) the additional duty and drawbacks charged and allowed by this Resolution in respect of beer shall continue to be charged and allowed so long as the duty of customs continued by this Resolution is charged on hops.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

BREWERS' LICENCE DUTY.

Resolved,
That, as respects the excise duty chargeable under the First Schedule to the Finance (1909–10) Act, 1910, on any licence to a brewer for sale granted on or after the first day of October, nineteen hundred and thirty-three—

(a) the rate chargeable for every fifty barrels or fraction of fifty barrels in excess of one hundred barrels brewed during the preceding year shall be reduced from twelve shillings to eight shillings; and
(b) the brewer shall cease to be entitled to the option conferred by the said Schedule of having the duty charged by reference to standard barrels, and the duty shall be chargeable by reference to bulk barrels only."

MATCHES (CUSTOMS).

Resolved,
That, in lieu of the Customs duties now chargeable on matches, there shall, on and after the twenty-sixth day of April, nineteen hundred and thirty-three, be charged the following duties, that is to say—



s.
d.


Containers in which there are not more than 10 matches—




For every 1,000 such containers
6
8


Containers in which there are more than 10 matches, but not more than 20 matches—




For every 1,000 such containers
13
4


Containers in which there are more than 20 matches, but not more than 50 matches—




For every 144 such containers
4
9


In respect of every additional 25 matches, or part of 25 matches, over 50 in a container—




For every 144 such containers, an additional duty of
2
5


and so in proportion for any less number of containers.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

MECHANICAL LIGHTERS (CUSTOMS).

Resolved,
That, as from the twenty-sixth day of April, nineteen. hundred and thirty-three—

(a) the rate of the duty of customs chargeable under section six of the Finance Act, 1928, on any mechanical lighter, and on any component part of a mechanical lighter, other than a flint, shall be increased to one shilling and sixpence;
(b) paragraph (d) of subsection (3) of the said section six, and any regulations made thereunder providing for the receipt by licensed manufacturers of mechanical lighters in an incomplete state or of parts of mechanical lighters without payment of duty, shall cease to have effect as respects customs duty.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

MECHANICAL LIGHTERS (EXCISE).

Resolved,
That, as from the twenty-sixth day of April, nineteen hundred and thirty-three, the rate of the duty of excise chargeable under section six of the Finance Act, 1928, on every mechanical lighter manufactured in the United Kingdom which is complete, or which could be made complete by the addition of a flint, and on every mechanical lighter sent out in an incomplete state from the premises of a manufacturer of mechanical lighters, shall be increased to one Shilling.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

REDUCTION- OF REBATE ON HEAVY HYDRO-CARBON OILS.

Resolved,
That, as from six o'clock in the evening of the twenty-fifth day of April, nineteen hundred and thirty-three, the rate of the rebate to be allowed under sub-section (3) of section two of the Finance Act, 1928, as amended by any subsequent enactment, on the delivery for home consumption of hydrocarbon oils other than light oils, shall be reduced from eight pence per gallon to seven pence per gallon.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

EXCISE DUTY ON PETROLEUM OILS OTHER THAN LIGHT OILS.

Resolved,
That, in the case of all petroleum oils, other than light oils, which at six o'clock in
the evening of the twenty-fifth day of April, nineteen hundred and thirty-three,

(a) are in any place in the United Kingdom other than a bonded warehouse or refinery or in any vessel carrying any such oil from one port or place in the United Kingdom to another; and
(b) are in the ownership or possession of any person who holds a quantity thereof exceeding ten thousand gallons;
an excise duty at the rate of one penny per gallon shall be payable on the quantity so held in excess of ten thousand gallons.

BRITISH SPARKLING WINES (EXCISE).

Resolved,
That, as from the twenty-sixth day of April, nineteen hundred and thirty-three, the rate of the duty of excise now chargeable on sweets shall, in the case of sparkling sweets, be increased from one shilling and six pence to seven shillings and sixpence for every gallon, and the said duty shall be chargeable on sweets sent out from the premises of any person who has rendered the sweets sparkling as well as on sweets sent out from the premises of a maker of sweets for sale:
Provided that if, in the case of sweets which are sent out from the premises of a person who has rendered the sweets sparkling, it is shown to the satisfaction of the Commissioners of Customs and Excise that a duty of one shilling and sixpence per gallon has been paid, the duty chargeable under this Resolution shall be reduced by the amount of the duty so paid.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

POWER OF TREASURY TO VARY DUTIES OF CUSTOMS AND EXCISE ON SILK AND ARTIFICIAL SILK.

Resolved,
That the Treasury shall have power, on the recommendation of the Import Duties Advisory Committee and after consultation with the Board of Trade, by order—

(a) to repeal, or reduce the rate or amount of, all or any.of the duies, or drawbacks of duties, of customs or excise now charged or allowed on silk or artificial silk or artcles made wholly or in part of silk or artificial silk, and to amend or repeal all or any of the provisions of the enactments relating to any such duty or drawback;
(b) to direct that a new duty of customs shall be charged (whether in addition to or in substitution for any duty theretofore chargeable or otherwise) on silk or artificial silk of any class or description or on articles of any class or description made wholly or in part of silk or artificial silk."

REPAYMENT OF DUTY UNDER SECTION THREE OF THE FINANCE ACT, 1925.

Resolved,
That, where the amount of the duty paid under Section three of the Finance Act, 1925, on any article imported on or after the twenty-sixth day of April, nineteen hundred and thirty-three, is repayable as provided by Sub-section (3) of Section thirteen of the Finance (No. 2) Act, 1915, as applied for the purposes of the said Section three, the amount repayable shall be reduced by a sum equal to the amount of any duty which would have been chargeable on the article under the Imports Duties Act, 1932, if the first-mentioned duty had not. been paid.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

VALUATION OF GOODS FOR PURPOSE OF ALL AD VALOREM DUTIES.

Resolved,
That, for the purpose of any enactment whereunder a duty of Customs is chargeable on goods by reference to the value thereof, the value of the goods shall be ascertained in accordance with the provisions of Sections fifteen and sixteen of the Import Duties Act., 1932.

SUBSTITUTION OF SPECIFIC DUTIES FOR GENERAL AD VALOREM DUTY.

Resolved,
That the Treasury shall have power, on the recommendation of the Import Duties Advisory Committee, by order to direct from time to time, as respects goods of any class or description which are chargeable, or which it is apprehended will shortly become Chargeable, with the general ad valorem duty, that a duty chargeable by reference to weight or other measure of quantity at such rate as may be specified in the order shall be substituted for the general ad valorem duty, notwithstanding that the duty so substituted may be equivalent to a duty of more or less than ten per cent. of the value of some of the goods falling within that class or description.

METHOD OF ASCERTAINING WHETHER GOODS ARE EMPIRE PRODUCTS FOR THE PURPOSE OF THE IMPORT DUTIES ACT, 1932, AND THE OTTAWA AGREEMENTS ACT, 1932.

Resolved,
That, for the purposes of the Import Duties Act, 1932, and the Ottawa Agreements Act, 1932, it is expedient to amend the provisions contained in section six of, and the Third Schedule to. the first mentioned Act.

APPLICATION OF SECTION FOURTEEN OF THE IMPORT DUTIES ACT, 1932, TO EMBROIDERED GOODS.

Resolved,
That—

(a) where goods to which this Resolution applies are reimported into the United Kingdom after exportation therefrom, and it is shown to the satisfaction of the Commissioners of Customs and Excise that they have been subjected abroad to a process of embroidery, but to no other process whereby their form or character is changed, the provisions of section fourteen of the Import Duties Act, 1932, relating to goods which have been subjected to a process abroad, but of which the form and character has not been changed, shall apply to the goods, notwithstanding that the goods as re-imported do not fall within the same class or description as that in which they fell in the state in which they were exported;
(b) the goods to which this Resolution applies are goods made wholly or partly of cotton, wool (including alpaca, mohair, cashmere, llama, vicuna and camels' hair), hemp of any kind, flax or jute.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

MECHANICALLY-PROPELLED VEHICLES.

Resolved,
That—

(a) as from the first day of January, nineteen hundred and thirty-four, Section thirteen of the Finance Act, 1920, which imposes duties of excise in respect of mechanically-propelled vehicles, shall, as amended by any subsequent enactment, have effect as if the rates of duties set out in the First, Second and Third Tables annexed to this Resolution were respectively substituted for the rates set out in paragraphs 3, 4 and 5 of the Second Schedule to the said Act;
(b) for the purpose of the said Tables—

(i) the expression "hackney carriage" has the meaning assigned to it by Section four of the Customs and Inland. Revenue Act, 1888;
(ii) the expression "goods vehicles" means vehicles (including tricycles weighing more than 8 cwt. unladen) constructed or adapted for use and used for the conveyance of goods or burden of any description, whether in the course of trade or otherwise;
(iii) the expression "pneumatic tyres" means such tyres as are declared by regulations made under See-
82
tion twelve of the Roads Act, 1920 (as amended by any subsequent enactment) to be pneumatic tyres;
(iv) the expression "light oils" has the meaning assigned to it by Sub-section (3) of Section two of the Finance Act, 1928;
(v) the expression "coal gas" means the inflammable gaseous product obtained by heating coal or coke with or without the addition of steam but with limitation of air, or such a product mixed with gaseous products derived from hydrocarbon oils as defined in Sub-section (9) of Section two of the Finance Act, 1928."

TABLE 1.


Hackney Carriages.


Description of vehicles.
Rate of Duty.



s.
d.


(a) Hackney carriages being tram-cars
15
0


(b) Hackney carriages (other than tramcars) which are propelled by steam or which are not constructed or adapted to use as feel any fuel other than light oils:

Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely With pneumatic tyres.
Other vehicles.


Having a seating capacity for: —
£
s.
d.
£
s.
d.


Not more than 4 persons
10
0
0
10
0
0


More than 4 but not more than 8 persons.
12
0
0
12
0
0


More than 8 but not more than 14 persons.
24
0
0
30
0
0


More than 14 but not more than 20 persons.
36
0
0
45
0
0


More than 20 but not more than 26 person
48
0
0
60
0
0


More than 26 but not more than 32 persons.
57
12
0
72
0
0


More than 32 but not more than 40 persons.
67
4
0
84
0
0


More than 40 but not more than 48 persons.
76
16
0
96
0
0


More than 48 but not more than 56 persons.
86
8
0
108
0
0


More than 56 but not more than 64 persons.
96
0
0
120
0
0


More than 64 persons— For the first 64 persons.
96
0
0
120
0
0


For each additional person in excess of 64.
1
4
0
1
10
0

(c) Hackney carriages (other than tramcars) which are constructed or adapted to use coal gas as fuel:


Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other vehicles.


Having a seating capacity for:—
£
S.
d.
£
s
d.


Not more than 4 persons
10
0
0
10
0
0


More than 4 but not more than 8 persons
12
0
0
12
0
0


More than 8 but not more than 14 persons.
28
0
0
35
0
0


More than 14 but not more than 20 persons.
40
0
0
0
0
0


More than 20 but not more than 26 persons.
56
0
0
70
0
0


More than 26 but not more than 32 persons.
72
0
0
90
0
0


More than 32 but not more than 40 persons.
88
0
0
110
0
0


More than 40 but not more than 48 persons.
104
0
0
130
0
0


More than 48 but not more than 56 persons.
116
0
0
145
0
0


More than 56 but not more than 64 persons.
128
0
0
160
0
0


More than 64 persons— For the first 64 persons.
128
0
0
160
0
0


For each additional person in excess of 64.
1
12
0
2
0
0

(d) Hackney carriages not chargeable with duty under the foregoing provisions of this Table:


Description of Vehicles,
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other vehicles.


Having a seating capacity for: —
£
s.
d.
£
s.
d.


Not more than 4 persons
10
0
0
10
0
0


More than 4 but not more than 8 persons.
12
0
0
12
0
0


More than 8 but not more than 14 persons.
32
0
0
40
0
0


More than 14 but not more than 20 persons.
48
0
0
60
0
0


More than 20 but not more than 26 persons.
68
0
0
85
0
0


More than 26 but not more than 32 persons.
88
0
0
110
0
0


More than 32 but not more than 40 persons.
108
0
0
135
0
0


More than 40 but not more than 48 persons.
128
0
0
160
0
0


More than 48 but not more than 56 persons.
148
0
0
185
0
0


More than 56 but not more than 64 persons.
164
0
0
205
0
0

Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other vehicles.



£
s.
d.
£
s.
d.


More than 64 persons— For the first 64 persons.
164
0
0
205
0
0


For each addiifonal person in excess of 64.
2
0
0
2
10
0

For the purposes of this Table the number of persons mentioned does not include the driver of the vehicle and the seating capacity of a vehicle shall be determined in accordance with provisions made by regulations under Section twelve of the Roads Act, 1920.


Table II.


Agricultural Engines, Tractors, &c.


Description of vehicles.
Rate of Duty.



£
s.
d.


(a) Locomotive ploughing engines, tractors, agricultural tractors and other agricultural engines, which are not used on roads for hauling any objects except their own necessary gear, threshing appliances, farming implements or supplies of water or fuel required for the purposes of the vehicle or for agricultural purposes
0
5
0


(b) Vehicles designed, constructed and use for the purpose of trench digging and other excavation work which are used on roads only for that purpose or for the purpose of proceeding to and from the place where they are to be used for that purpose, and when so proceeding carry or haul no load other than such as is necessary for their propulsion or equipment
0
5
0


(c) Mowing machines
0
5
0


(d) Tractors, agricultural tractors and agricultural engines, (other than vehicles in respect of which a duty of five shillings is chargeable under the foregoing provisions of this Table) which are registered under the Roads Act, 1920, in the name of a person engaged in agriculture, and are not used on roads for hauling any objects except the produce of, or articles required for the purposes of, the agricultural land occupied by that person—

£
s.
d.


Not exceeding 5 tons in weight unladen but not exceeding 10 tons in weight unlanden
12
0
0


Exceeding 5 tons in weight unladen but not exceeding 10 tons in weight unladen
20
0
0


Exceeding 10 tons in weight unladen—





For the first 10 tons
20
0
0


For each additional ton or part of a ton in excess of 10 tons
2
0
0


(e) Vehicles (other than vehicles in respect of which duty is chargeable under the fore going provisions of this Table) which are constructed and used upon roads for haulage solely and not for the purpose of carrying or having superimposed upon them any load except such as is necessary for their propulsion or equipment—





(i) Being vehicles registered under the Roads Act, 1920, in the name of a person following the business of a travelling showman and used solely by him for the purposes of his business and for no other purpose—





Not exceeding 7¼ tons in weight unladen
25
0
0


Exceeding 7¼ tons in weight unladen but not exceeding 8 tons in weight unladen
30
0
0


Exceeding 8 tons in weight unladen but not exceeding 10 tons in weight unladen
35
0
0


Exceeding 10 tons in weight unladen—





For the first 10 tons
35
0
0


For each additional ton or part of a ton in excess of 10 tons
5
0
0


(ii) Other such vehicles— Not exceeding 2 tons in weight unladen
25
0
0


Exceeding 2 tons in weight unladen but not exceeding 4 tons in weight unladen
40
0
0


Exceeding 4 tons in weight unladen but not exceeding 6 tons in weight unladen
55
0
0


Exceeding 6 tons in weight unladen but not exceeding 7¼ tons in weight un Laden
70
0
0


Exceeding 7¼ tons in weight unladen but not exceeding 8 tons in weight unladen
85
0
0


Exceeding 8 tons in weight unladen—





For the first 8 tons
85
0
0


For each additional ton or part of a ton in excess of 8 tons
15
0
0

Table III.


GOODS Vehicles.


(a)Goods vehicles registered under the Roads Act, 1920, in the name of a person engaged in agriculture and used on roads solely by that person for the purpose of the conveyance of the produce of the conveyance of the produce of, or of articles required for the purposes of, the agricultural land which he occupies and for no other purpose:


Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other vehicles.



£
s.
d.
£
s.
d.


Not exceeding 12 cwt. in weight unladen.
10
0
0
10
0
0


Exceeding 12 cwts., but not exceeding 1 ton in weight unladen.
11
0
0
11
0
0


Exceeding 1 ton, but not exceeding 1½ tons in weight unladen.
12
0
0
12
0
0


Exceeding 1½ tons, but not exceeding 2 tons in weight unladen.
13
0
0
13
0
0


Exceeding 2 tons, but not exceeding 2½ tons in weight unladen.
14
0
0
18
13
4


Exceeding 2½ tons, but not exceeding 3 tons in weight unladen.
16
0
0
21
6
8


Exceeding 3 tons in weight unladen—








For the first 3 tons
16
0
0
21
6
8


For each additional ton or part of a ton in excess of 3 tons.
2
0
0
2
13
4

(b) Goods vehicles registered under the Roads Act, 1920, in the name of a person following the business of a travelling showman, which are permanently fitted with a living van or some other special type of body or superstructure, forming part of the equipment of his show, and used solely by him for the purposes of his business, and for no other purpose:


Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other vehicles.



£
s.
d.
£
s.
d.


Not exceeding 12 cwt. in weight unladen.
10
0
0
10
0
0


Exceeding 12 cwt., but not exceeding 1 ton in weight unladen.
12
0
0
12
0
0


Exceeding 1 ton, but not exceeding 1½ tons in weight unladen.
14
0
0
14
0
0

Description of Vehicles.
Rate of Duty,


Vehicles fitted entirely with pneumatic tyres.
Otter vehlelea.



£
s.
d.
£
s.
d.


Exceeding 1½ tons, but not exceeding 2 tons in weight unladen.
16
0
0
16
0
0


Exceeding 2 tons, but not exceeding 2½ tons in weight unladen;
18
0
0
24
0
0


Exceeding 2½ tons, but not exceeding 3 tons in weight unladen.
20
0
0
26
13
4


Exceeding 3 tons in weight unladen— For the first 3 tons
20
0
0
96
13
4


For each additional ton or part of a ton in excess of 8 tons.
4
0
0
5
6
8

(c) Goods vehicles other than vehicles chargeable with duty under para graphs (a) and (&) of tibia table—

(i) which are electrically propelled:


Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyren.
Other vehicles.



£
s.
d.
£
s.
d.


Not exceeding 12 cwt. in weight unladen.
10
0
0
10
0
0


Exceeding 12 cwt., but not exceeding 1 ton in weight unladen.
15
0
0
15
0
0


Exceeding 1 ton, but not exceeding 2 tons in weight unladen.
20
0
0
20
0
0


Exceeding 2 tons, but not exceeding 2½ tons in weight unladen.
25
0
0
33
6
8


Exceeding 2½ tons, but not exceeding 3 tons in weight unladen.
30
0
0
40
0
0


Exceeding 3 tons, but not exceeding 4 tons in weight unladen.
35
0
0
46
13
4


Exceeding 4 tons, but not exceeding 6 tons in weight unladen.
40
0
0
53
6
8


Exceeding 5 tons, but not exceeding 6 tons in weight unladen.
45
0
0
60
0
0


Exceeding 6 tons in weight unladen— For the first 6 tons
46
0
0
60
0
0


For each additional ton or part of a ton in excess of 6 tons.
10
0
0
18
6
8

(ii) which are propelled by steam:


Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other vehicles.



£
8.
d.
£
s.
d.


Nct exceeding 2 tons in weight unladen.
25
0
0
25
0
0


Exceeding 2 tons, but not exceeding 2½ tons in weight unladen.
30
0
0
40
0
0


Exceeding 2£ tons, but not exceeding 3 tons in weight unladen.
35
0
0
46
13
4


Exceeding 3 tons, but not exceeding 4 tons in weight unladen.
50
0
0
66
13
4


Exceeding 4 tons, but not exceeding 5 tons in weight unladen.
70
0
0
93
6
8


Exceeding 5 tons, but not exceeding 6 tons in weight unladen.
90
0
0
120
0
0


Exceeding 6 tons in weight unladen—








For the first 6 tons
90
0
0
120
0
0


For each additional ton or part of a ton in excess of 6 tons.
15
0
0
20
0
0

(iii) which are not constructed or adapted to use as fuel any fuel other than light oils:


Description of Vehicles.
Rate Of Duty.


Vehicles fitted entirely with pneumatic tyres
Other vehicles.



£
s.
d.
£
s.
d.


Not exceeding 12 cwt. in weight unladen.
10
0
0
10
0
0


Exceeding 12 cwt., but not exceeding 1 ton in weight unladen.
15
0
0
15
0
0


Exceeding 1 ton,, but not exceeding 1½ tons in weight unladen.
20
0
0
20
0
0


Exceeding 1½ tons, but not exceeding 2 tons in weight unladen.
25
0
0
25
0
0


Exceeding 2 tons, but not exceeding 2½ tons in weight unladen.
30
0
0
40
0
0


Exceeding 2½ tons, but not exceeding 3 tons in weight unladen.
35
0
0
46
13
4


Exceeding 3 tons, but not exceeding 4 tons in weight unladen.
60
0
0
66
13
4


Exceeding 4 tons in weight unladen.








For the first 4 tons
50
0
0
66
13
4


For each additional ton or part of a ton in excess of 4 tons.
20
0
0
26
13
4

(iv)which are constructed or adapted to use coal gas as fuel:


Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other vehicles.



£
s.
d
£
s.
d.


Not exceeding 2 tons in weight unladen.
30
0
0
30
0
0


Exceeding 2 tons, but not exceeding 2½ tons in weight unladen.
35
0
0
46
13
4


Exceeding 2½ tons, but not exceeding 3 tons in weight unladen.
40
0
0
53
6
8


Exceeding 3 tons, but not exceeding 4 tons in weight unladen.
60
0
0
80
0
0


Exceeding 4 tons, but not exceeding 5 tons in weight unladen.
80
0
0
106
13
4


Exceeding 5 tons in weight unladen—








For the first 5 tons
80
0
0
106
13
4


For each additional ton or part of, a ton in excess of 5 tons.
25
0
0
33
6
8

(v) which are not chargeable with duty under the foregoing provisions of this paragraph—


Description of Vehicles.
Rate of Duty.


Vehicles fitted entirely with pneumatic tyres.
Other Vehicles.



£
s.
d.
£
s.
d.


Not exceeding 2½ tons in weight unladen.
35
0
0
46
13
4


Exceeding 2£ tons, but not exceeding 3 tons in weight unladen.
45
0
0
60
0
0


Exceeding 3 tons, but not exceeding 4 tons in weight unladen.
65
0
0
86
13
4


Exceeding 4 tons, but not exceeding 5 tons in weight unladen.
90
0
0
120
0
0


Exceeding 5 tons, but not exceeding 6 tons in weight unladen.
120
0
0
160
0
0


Exceeding 6 tons, but not exceeding 7 tons in weighf unladen.
150
0
0
200
0
0


Exceeding 7 tons in weight unladen—








For the first 7 tons
150
0
0
200
0
0


For each additional ton or part of a ton in excess of 7 tons.
25
0
0
33
6
8

£
s.
d.


(d) Goods vehicles if used for drawing a trailer—





where the weight of the vehicle unladen does not exceed 2½ tons.
10
0
0


where the weight of the vehicle unladen exceeds 2½ tons but does not exceed 4 tons.
15
0
0


where the weight of the vehicle unladen exceeds 4 tons.
20
0
0

The duties chargeable under paragraph (d) of this Table in respect of any vehicle shall be chargeable in addition to the duty chargeable on the vehicle under paragraph (a) (b) or (c) of this Table.
For the purposes of this Table a vehicle registered under the Roads Act, 1920, in the name of a person engaged in agriculture shall not be deemed to be used otherwise than solely by that person for the purpose of the conveyance of the produce of, or of articles required for the purposes of, the agricultural land which he occupies, by reason only that on an occasion when the vehicle is being used by that person for that purpose it is also used for the conveyance for some other person engaged in agriculture of the produce of, or articles required for the purposes of, agricultural land occupied by that other person, if it is shown,—

(a) that the vehicle is so used only occasionally;
(b) that the goods conveyed for that other person represent only a small proportion of the total amount of goods which the vehicle is conveying on that occasion;
(c) that no payment or reward of any kind is, or is agreed to be, made or given for the conveyance of the goods of that other person.

INCOME TAX.

CHARGE OF TAX.

Resolved,
That—

(a) Income Tax for the year 1933–34 shall be charged at the standard rate of five shillings in the pound, and, in the case of an individual whose total income from all sources exceeds two thousand pounds, at such higher rates in respect of the excess over two thousand pounds as Parliament may hereafter determine;
(b) all such enactments as had effect with respect to the Income Tax charged for the year 1932–33 shall have effect with respect to the Income Tax charged for the year 1933–34.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

HIGHER RATES OF INCOME TAX FOR 1932–33.

Resolved,
That Income Tax for the year 1932–33 shall he charged, in the case of an indi-
vidual whose total income from all sources "exceeded two thousand pounds, at the same higher rates in respect of the excess over two thousand pounds as were charged for the year 1931–32.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

TRANSFER TO EXCHEQUER OF BALANCE OF WAR LOAN DEPRECIATION FUND.

Resolved,
That the unexpended balance of the Depreciation Fund established in connection with the Four per cent. War Loan(1929–42) and the Five per cent. War Loan (1929–47) shall, at such time as the Treasury may determine, be paid into the Exchequer."—[Mr. Chamberlain.]

AMENDMENT OF LAW.

Motion made, and Question proposed,
That it is expedient to amend the law relating to National Debt, Customs, and In-
land Revenue (including Excise), and to make further provision in connection with finance."—[Mr. Chamberlain.]

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Captain Margesson.]

Resolutions to be reported To-morrow.

Committee also report Progress; to sit again To-morrow.

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Captain Margeson.]

Adjourned accordingly at Twenty-seven Minutes before Seven o'Clock.